Immigrant Entrepreneurship IMMIGRANT ENTREPRENEURSHIP the German-American Experience Since 1700

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Bulletin of the GHI | Supplement 12

Bulletin of the German Historical Institute Supplement 12 (2016)

Immigrant Entrepreneurship IMMIGRANT ENTREPRENEURSHIP The German-American Experience since 1700

Edited by Hartmut Berghoff and Uwe Spiekermann Bulletin of the German Historical Institute Washington DC

Editor: Richard F. Wetzell

Supplement 12 Supplement Editor: Patricia C. Sutcliffe

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ISSN 1048-9134 Cover: German migrants leaving their fatherland: “Seelenwanderung,” cartoon in Fliegende Blätter 38 (1863): 45. Bulletin of the German Historical Institute Supplement 12 | 2016

Immigrant Entrepreneurship: The German-American Experience since 1700

INTRODUCTION

5 Immigrant Entrepreneurship as a Challenge for Historiography Hartmut Berghoff and Uwe Spiekermann

THE ANALYSIS OF IMMIGRANT ENTREPRENEURSHIP

19 Entrepreneur Biographies as Microhistories of X Jürgen Finger

37 Why Biographies? Actors, Agencies, and the Analysis of Immigrant Entrepreneurship Uwe Spiekermann

53 The Immigrant Entrepreneurship Project: Rationale, Design, and Outcome Hartmut Berghoff

69 A Credit to Their Nation: Eastern European Jewish Immigrant “Bankers,” Credit Access, and the Transnational Business of Mass Migration, 1873-1914 Rebecca Kobrin

ENTREPRENEURSHIP IN THE MIRROR OF BIOGRAPHICAL ANALYSIS

FROM THE COLONIAL ECONOMY TO EARLY INDUSTRIALIZATION 93 Johann Christoph Sauer: Pioneer of the German-American Press Hans Leamann 113 Johann Andreas Albrecht: Making Riﬂ es in Eighteenth-Century Moravian Economies Scott Paul Gordon

THE EMERGENCE OF AN INDUSTRIAL NATION 141 Mathilde Franziska Anneke (1817-1884): Social Entrepreneur and Suffragette Stephani Richards-Wilson

167 A Reputation for Cross-Cultural Business: Henry Villard and German Investment in the United States Christopher Kobrak

FROM THE END OF THE GILDED AGE TO THE PROGRESSIVE ERA 187 “A Most Remarkable Man”: Adolphus Busch and the Evolution of the American Brewing Industry Timothy J. Holian

213 Jacob H. Schiff, Banker and Philanthropist Bernice Heilbrunn

THE AGE OF THE WORLD WARS 241 Making Entertainment American: Florenz Ziegfeld Jr. Heather Hester

263 An Ordinary Man among Titans: The Life of Walter P. Spreckels Uwe Spiekermann

285 Builder of the Liberal Consensus: Henry J. Kaiser (1882-1967) Tim Schanetzky

FROM THE POSTWAR BOOM TO GLOBAL CAPITALISM 309 “My Golden Gut” and Other Stories: How Lillian Vernon Built Her Brand Ute Mehnert

333 Political Ideology and Economic Activity: Peter Thiel’s Libertarian Entrepreneurship Meghan O’Dea

2 GHI BULLETIN SUPPLEMENT 12 (2016) Introduction

The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

IMMIGRANT ENTREPRENEURSHIP AS A CHALLENGE FOR HISTORIOGRAPHY

Hartmut Berghoff and Uwe Spiekermann

From 2010 to 2016, the German Historical Institute’s research project “Immigrant Entrepreneurship: German-American Business Biogra- phies, 1720 to the Present,” explored the entrepreneurial role and the economic performance as well as the social and cultural experience of German-American businesspeople in the U.S.1 Combining nearly 200 thoroughly researched biographies, it off ers a new integrative perspective not only to trace the lives, careers, and business ventures of signiﬁ cant immigrants but also to answer core questions of American, business, and migration history in a new way. Using a freely accessible website, the project presents the results of thorough research not only into the academic world but also into the general public. It is part of the German Historical Institute’s ongoing commitment to digital and public history.

The project’s raison d’être stemmed from the transatlantic and transnational mission of the institute. “Immigrant Entrepreneur- ship” questions notions of American exceptionalism, situates U.S. history in a transnational framework and studies the formation and changes of an immigrant nation and its business community over a period of nearly three hundred years. A detailed description of the project’s rationale is presented in Hartmut Berghoff ’s article in this volume. The project also aimed to put Germany and the Ger- man states in a global perspective: The transnational biographies of migrants allow us to reconceptualize the meaning and relevance of the heterogeneous Western nation-states. Focusing on German- American businesspeople meant focusing on an immigrant nation — the U.S. — and an emigrant state, which itself had turned into an immigrant state by the end of the nineteenth century — Germany. In the twentieth century, in Germany immigration and emigration took place side by side.

The Immigrant Entrepreneurship Project is not an outgrowth of the historiographic trend or sometimes fashion toward transnational history. It was rather primarily driven by the aim to broaden the empirical foundation of immigration and business history in the U.S. The objects of most historiography of German immigration to the 1 For details see http://www. immigrantentrepreneurship. U.S. have been mass and group immigration, while the formation of org.

BERGHOFF AND SPIEKERMANN | INTRODUCTION 5 elites — perhaps with the exception of culture and politics — was regularly neglected. “Facts” on elites, however, are important to examine the promises of modern capitalist societies — the idea of upward mobility and equality of chances.

This is not the place to repeat all of our ambitious research questions.2 Instead, this volume will present a few results from the Immigrant Entrepreneurship Project’s research. The eleven rather diff erent biographies included not only span more than three hundred years of German-American immigrant experience, but they also portray the changes of the British colonies and the U.S. from colonial times to the present. The four introductory articles discuss the challenges of the genre of (entrepreneurial) biographies, of transnational history, and give an overview of the project’s empirical ﬁ ndings.

Workﬂ ow and Structure of the Immigrant Entrepreneurship Project As of September 1, 2016, 185 biographies of approximately 8,000 words each had been posted on the project’s website http://www. immigrantentrepreneurship.org. Additional manuscripts are still in the editorial and publishing process. More than 2,000 images and ca. 1,000 documents provide additional evidence and allow a detailed understanding of the immigrants’ experience. The research project covers not only the well-documented period of the second half of the nineteenth and early twentieth century, especially the Gilded Age and the Progressive Era, but more than three hundred years of the German-American experience: the project’s website currently presents approximately thirty biographies each for the period before 1840 and aft er World War II to give vivid insight into the fundamental long-term changes in immigration, entrepreneurship, and the economic, social, political, and cultural framework of the pre- and postindustrial periods.

The main practical task of the project was to transform aspiring research goals into a continuous workﬂ ow. The project was headed by two general editors, Hartmut Berghoff and Uwe Spiekermann. 2 See Hartmut Berghoff and Uwe Spiekermann, “Immi- Utilizing funds from the German Historical Institute Washington, grant Entrepreneurship: The DC, and substantial support by the German Federal Ministry of German-American Business Biography, 1720 to the Pres- Economics and Technology, they established a core group of research- ent: A Research Project,” Bul- ers, editors, and web specialists at the German Historical Institute, letin of the German Historical Institute 47 (2010): 69-82. and invited an international economic advisory board to formulate

6 GHI BULLETIN SUPPLEMENT 12 (2016) The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

the key principles of this large and ambitious research endeavor.3 This resulted not only in key defi nitions — fi rst of all, a pragmatic answer to the complex question of “Germanness” — but also in detailed plans for the structure of the project: The corpus of biographies was divided into fi ve chronological “volumes.” Five outstanding American scholars were recruited as volume editors — Marianne Wokeck (Indi- ana University, Purdue University Indianapolis), William J. Hausman (College of William & Mary), Giles Hoyt (Indiana University, Purdue University Indianapolis), Jeff rey Fear (University of Glasgow), and Dan Wadhwani (University of the Pacifi c). The task of these experts in either business and/or German-American history was twofold: fi nding well-qualifi ed authors for the individual volumes, and reviewing the incoming manuscripts to guarantee the scholarly quality we expected.

The Immigrant Entrepreneurship Project is an attempt to integrate most of these inspirations and combine advanced business history with the challenges of the many new directions in the historical profession. Critical to a one-dimensional microeconomic functionalism, it reintegrated into business history the entrepreneurs’ values and beliefs, the motivations of leadership, the inﬂ uence of family, private networks, and employees, and reputation and trust — in accordance with recent suggestions by business historians Philip Scranton and Patrick Fridenson. Entrepreneurs were analyzed as individuals in their diff erent networks shaping and reshaping American society, on the one hand, and in their reactions to their changing social and cultural environment, on the other.4 3 For details comp. Uwe All contributors to the Immigrant Entrepreneurship Project were Spiekermann and Hartmut Berghoff , “Immi- asked to deliver a biography of around 8,000 words, each of which grant Entrepreneurship: German-Ameri can Busi- should deal with similar categories of the given entrepreneur’s life ness Biographies, 1720 to and work (see Figure 1).5 The goal was to present individual biogra- the Present. Zielsetzungen, Organisation und He- phies in a structured and comparable way: the eleven biographical rausforderungen eines articles in this volume give proof of this. Forschungsprojektes des Deutschen Historischen Instituts Washington,” The authors faced an ambitious research program: First, they were Jahrbuch der historischen to focus on the family background of the entrepreneurs. This in- Forschung: Berichtsjahr 2012 (2013): 53-61. cluded their geographical background — mostly in the German states or Germany within the borders of 1871 — occupation, religion, 4 Philip Scranton and Patrick Fridenson, Reimag- education, and social milieu of both the parents and their candidates. ining Business History The circumstances of migration were also to ﬁ gure prominently. (Baltimore, 2013), 201. This included not only the subjects’ motives for leaving their fa- 5 For more details, see http:// therland but also their resources and aspirations in the U.S. and immigrantentrepreneurship. org/resources-for- later on as entrepreneurs. Second, the individual biographies were contributors.php.

BERGHOFF AND SPIEKERMANN | INTRODUCTION 7 always to be accompanied by the history of the subjects’ businesses: Immigrant fi rms were de facto oft en diff erent from those of born Americans, and the subjects’ lives were always linked to the development of their businesses. These business history sections were to include the specifi c resources and obstacles, the comparative advantages and disadvantages of the immigrants, and their particular business strategies. They Figure 1: Suggested outline were also to cover questions of success and failure, the role of local, of a biographical article for regional, federal, and international politics, access to capital and the Immigrant Entrepre- neurship Project. business networks, and the use of technology. We asked the authors to refl ect on the entrepreneurs’ signifi cance, and particularly on their contributions to developing new markets and the rise of their particular industries. A third element of every biography was to deal with the subjects’ social status, with private networks, with family and public life. Entrepreneurs are representatives of a specifi c social class and their culture(s). These sections were to include the role of spouse(s) and children, the status of siblings, philanthropic and non-economic activities, religious affi liation, and leisure activities. The candidates’ political and social engagement and their ethnic and transnational networks were other important features to be considered. The most challenging and innovative task, however, was to think and write all of this from the perspective of ethnicity and the immigrant experience. Our assumption was that the business careers and the private lives of the entrepreneurs were fundamentally shaped by their experience of being “strangers”6 to the new world.

This fairly rigid research outline was intended to enable comparisons across all the biographies. It was to be used ﬂ exibly to analyze an individual life and career and help to portray entrepreneurs as varia- tions within the general history. The structure could have reinforced the standard Whig history of success and social advancement. But such a stereotypical narrative was perpetually questioned by inter- vening factors that were unearthed through empirical results. The project’s guidelines were changed several times in response to results of the peer-review process.

6 Georg Simmel, “The Stranger,” The authors also encountered a rigid refereeing process (Figure 2). in The Sociology of Georg Simmel, Every article was reviewed by at least two senior scholars, normally ed. and trans. Kurt H. Wolff (Glencoe, 1950), 402-408. the volume editor and one of the two general editors. Aft er a ﬁ rst

8 GHI BULLETIN SUPPLEMENT 12 (2016) The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

round of revisions, the draft version was again reviewed by the GHI team. Content, language, and format were checked in detail. At the same time, the GHI team managed copyrights and the editing of images and documents. This structured workflow led to a rather high rate of revised and also rejected articles, but this Figure 2: Workfl ow was necessary in the interest of a high scholarly quality. It was par- of the Immigrant Entrepreneurship Project. ticularly important to live up to the standards of the diverse fi elds from German to American history, from business to migration history, from economic to cultural and social history, and to deal with the specifi c challenges of biographies, which Uwe Spiekermann highlights in his methodological contribution to this volume.

Challenges of a Research Project The detailed guidelines resulted from intense internal debates on the methodology and the main research questions. Still, the careful approach and the pronounced peer review could not keep the Im- migrant Entrepreneurship Project from being challenged by at least six problems:

First, it was very diffi cult — even for senior scholars — to overcome the retrospective and hagiographic traditions of rags-to-riches careers. The manuscripts emphasized that the American dream had created its own narratives; constant reﬂ ection and intervention was necessary to off er more nuanced biographies. Many authors tended to write somewhat heroic success stories of hard-working individuals, neglecting structural and situational preconditions. In addition, the American past was oft en purged of rather common prejudices against immigrants: widespread anti-Semitism, anti-Catholicism, and anti-socialism had important implications for business careers, both as obstacles and as push factors for niche economies.

Second, the intellectual traditions of unique opportunities and resources in the U.S. setting the respective immigrant entrepreneurs

BERGHOFF AND SPIEKERMANN | INTRODUCTION 9 on a one-way street to success were diffi cult to overcome. Within these traditions, success is understood as an American accomplishment, not as a result of the newcomers’ skills and resources, the knowledge and capital they had brought with them from abroad. It was a big challenge to debunk such clichés that involved the neglect of a detailed analysis of the German origins of the migrants. At the same time, there was a risk of overlooking the immigrants’ diffi culties in orientation and acculturation: German immigrants, indeed, had immense diffi culties with the patronage of the U.S. political machines, restrictive religious and moral codes, and nativist rejection and even violence.

Third, although the Immigrant Entrepreneurship Project is based on the work of approximately 150 authors, it proved very diffi cult to recruit highly skilled authors willing to accept the project’s main research questions. Moreover, approximately one quarter of all commissioned and submitted essays were not accepted.

A fourth challenge resulted from the design of the website: Although the website off ers a broad variety of individual lives, the outlines still focused on the reconstruction of a “standard life.” The heterogeneity of careers and business models (networks, family businesses, multiple-generation careers, siblings, etc.) was sometimes overshadowed by the standardized biography of one entrepreneur in his or her setting. And short careers that resulted in quickly earned fortunes were largely excluded as we focused on long- term developments.

Fift h, the project’s interest in “thick description” of the individual lives and careers oft en interfered with the general goal of empirically valid generalization. This is the core problem of every biography. Most articles did a fabulous job of clarifying the local circumstances of entrepreneurial signiﬁ cance and success and also of ascribing them as examples of more general economic, social, and cultural patterns. But comparison between diff erent branches, places, times, and ethnic conﬁ gurations was beyond the scope of any biographical essay — and contextual essays could not add these complex links. Hartmut Berghoff carves out some more general perspectives on the German-American immigrant entrepreneur’s experience in his contribution to this volume, but he is fully aware that more work has to be done to arrive at valid generalizations.

Finally, the project’s pioneering role generated problems of its own: Due to a lack of comparable projects of other immigrant groups,

10 GHI BULLETIN SUPPLEMENT 12 (2016) The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

cross-ethnic comparisons remained diffi cult. Although we organized several panels and workshops with leading experts to deal with this dimension, the analysis of the specifi cs and characteristics of German-American businesspeople is still a core challenge. This is because in the nineteenth century, narratives of national immigrant groups created their own historical reality. The fl oating defi nitions and meanings of “nations” make it possible to deconstruct the homogeneity of the “German-Americans” — but they do not make it possible to fi nd answers on the German-American business elite in contrast to, for instance, Anglo-Saxon, Irish- or Scandinavian- Americans. Transnational history has dealt with this problem on a theoretical level — but we defi nitely need empirical work and theories and methodologies that are more nuanced and fl exible to deal with the diff erent shades of identities and to compare the broken national identities of German-American immigrants with other immigrant groups in the U.S. and elsewhere. Now that much of the conceptual and empirical work has been completed and most of the biographies have been published, it is time to start such systematic research.

The Purpose of this Bulletin Supplement The goal of this Bulletin Supplement is twofold: First, it presents four contributions to the workshop “Immigrant Entrepreneurship in Transnational Comparative Perspective, 18th Century — Today,” which took place at the German Historical Institute in Washington, DC, on June 16-17, 2016. These essays off er additional impulses on how to use the rich materials of the project: Jürgen Finger and Uwe Spiekermann discuss the relevance of (entrepreneurial) biographies for business, migration, and general history. While Finger integrates the project’s work into the broader framework of modern cultural history, addressing the interaction between macro- and micro-levels of analysis, Spiekermann positions the biography as an important methodology for new and more advanced forms of historiography — beyond the dead ends of structural and modern cultural history. Hartmut Berghoff uses the Immigrant Entrepreneurship Project’s biographies to present some lessons from the project’s work and to off er ﬁ rst cautious generalizations on the German-American immigrant entrepreneurship experience. Finally, Rebecca Kobrin’s article broadens and questions our understanding of immigrant entrepreneurship. Her analysis of the transnational business careers of father and son Sender and Meyer Jarmulowsky, travel agents and bankers in Poland, Hamburg, and New York, questions “national”

BERGHOFF AND SPIEKERMANN | INTRODUCTION 11 narratives of immigration and emphasizes the dynamics of business life as a result of individual and political constellations, of rational calculation and dreams of prosperity, of business opportunities and market consolidations. All four articles help readers interpret the eleven biographies that follow in quite diff erent ways: as examples of a broader German-American immigrant experience, as expressions of multiple identities in the transatlantic world, as micro-histories of the fundamental transformation of the (Western) world to a modern industrial one, and as narratives that question stereotypical readings of our past.

The second goal of this supplement is to give a reasonably representative sample of individual biographies from the Immigrant Entrepre- neurship Project. This condensed overview is intended to encourage readers to have a closer look at the many more articles, as well as the much more numerous photographs and images, on the project’s website. Together they convey an impressive idea of human passion and ambition, of family networks and individual decision-making, of acculturation and a broad panorama of regional, national, and cultural identities.

The biographies illustrate the typical German-American niche economies of the eighteenth and nineteenth centuries. Hans Leaman’s contribution on printer and publisher Johann Sauer (1695-1758) leads us into a world of Pietistic religiosity and a German-language subculture dedicated to the praise of the Lord — and proﬁ ts that were modest and agreeable to God. Religious faith was crucial to the career of gun stocker Johann Andreas Albrecht (1718-1802). Scott Gordon gives instructive insights into a life dominated by the decisions of the Moravian community — and not by the self-made-man ideology of later times. Another example of such German language cultures is the career of political refugee and writer Mathilde Franziska Anneke (1817-1884), analyzed by Stephani Richards-Wilson.

While these early immigrants formed a niche society, late nineteenth- and twentieth-century German-Americans became an integral part of the American nation, although their identities oft en remained hybrid. Beer magnate Adolphus Busch (1839-1913) kept close ties to Germany and traveled back and forth across the Atlantic extensively. His biographer Timothy J. Holian presents him also as an incarna- tion of American self-promotion, atypical of the more restrained German-American entrepreneurs. Banker Jacob H. Schiff (1847-1920) represented solidity and integrity in the ﬁ nancial world; he even

12 GHI BULLETIN SUPPLEMENT 12 (2016) The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

rejected big business deals if they did not accord with his moral and religious compass. Biographer Bernice Heilbrunn emphasizes Schiff ’s eminent philanthropic activities and his conservative family ideals. While Schiff was a core player in the German-Jewish immigrant community of New York, West Coast large-scale project leader Henry J. Kaiser (1882-1967), portrayed by Tim Schanetzky, developed no close relationship to his parents’ fatherland and became a leading representative of American business in the interwar period.

The biographies also make clear that entrepreneurship underwent dramatic changes over the centuries. Albrecht was not more than a local carpenter for most of his career, working for local contractors and individual customers. Sauer sold only to the German-American community, while Busch served the whole American nation. Anneke was an important example of social entrepreneurship, while Kaiser, at the peak of his career, was a typical government contractor. Financial investor Peter Thiel (b. 1967) set a very diff erent tone in business, as Meghan O’Dea emphasizes. Based on credit and an idea of future, he has left a global footprint in the world of technology and venture capitalism.

German-American immigrants were oft en described as shrewd and industrious; and Schiff ’s narrative provides a good example of this. Investor and ﬁ nancier Henry Villard (1835-1900), however, was a typical robber baron of the Gilded Age, who made and lost several fortunes, as Christopher Kobrak recounts.

Such heterogeneity can also be seen in the world of female entrepreneurship. While in the late nineteenth century ﬁ gures like Anneke were rare exceptions and seven-eighths of married German women did not work outside the home, this pattern changed in the mid- twentieth century. Ute Mehnert introduces Lillian Vernon (1927-2015) as a housewife who wanted to add money to the family income — and became a leading player in the mail-order business.

While most German-American entrepreneurs built up their businesses in the U.S. and focused on the domestic market, others connected Germany, Europe, and America. Henry Villard attracted German direct and portfolio investments to the U.S., while Florence Ziegfeld Jr. (1867-1932) formed a new style of “American” entertainment. As Heather Hester demonstrates, he searched for new talents in Europe, encouraged them to come to the U.S., and merged diff erent cultural traditions into a new global product named “Broadway” and “American beauty.”

BERGHOFF AND SPIEKERMANN | INTRODUCTION 13 The Immigrant Entrepreneurship Project focused on “signifi cant” fi rst- and second-generation immigrant entrepreneurs. This should not be confused with permanent “success”or wealth, as Henry Villard’s career demonstrates. Uwe Spiekermann added the biography of an unknown sibling of the Spreckels family, leading fi gures in the sugar business, to portray a typical executive and small businessman. Walter P. Spreckels’ (1888-1976) career was interrupted by World War I and Prohibition, both important watersheds for German Americans in general.

While he was only an ordinary man, other immigrant entrepreneurs became American icons who fundamentally changed U.S. business and everyday life. Sauer is still known as a pioneer of the ethnic press in the U.S., Busch deeply inﬂ uenced U.S. drinking culture, Ziegfeld shaped the image of women and the urban lifestyle, while Thiel, with his investments in PayPal and Facebook, transformed methods of payment and everyday communication. The Immigrant Entrepre- neurship Project’s website off ers many more examples of these and other topics that were key to the German-American experience and U.S. culture and business.

Acknowledgments Public resources made the Immigrant Entrepreneurship Project possible: We are very grateful to the German Federal Ministry of Education and Research and the Max Weber Foundation for funding the German Historical Institute in Washington, DC, which provided most of the resources. An endeavor of this size, however, would have not been possible without additional and very substantial fi nancial support by the Transatlantic Program of the Government of the Federal Republic of Germany through funds of the European Recovery Program of the Federal Ministry of Economics and Tech- nology. Apart from fi nancial resources, we benefi ted tremendously from academic cooperation from the Hagley Museum and Library, the German American Chambers of Commerce, and the Friends of the German Historical Institute.

The biographies would not have been possible without the work of engaged and passionate authors who worked closely with a highly motivated project team, at the GHI project manager Jessica Csoma, research associates Bryan Hart, Christine Le Jeune, Kelly McCullough, Ashley Narayan, Megan O’Dea, Atiba Pertilla, Benjamin Schwantes, Simone Willnath, and Claudia Winkler. The external editors played a key

14 GHI BULLETIN SUPPLEMENT 12 (2016) The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

role. We owe a large intellectual debt to the Immigrant Entrepreneur- ship Project team: Volume editors Marianne S. Wokeck, William J. Hausman, Giles R. Hoyt, Jeff rey Fear, and R. Daniel Wadhwani.

This volume was proposed by the new GHI director Simone Lässig, who also pledged to maintain the project’s website at the GHI in the future. We are very thankful for her support.

Finally, we owe much credit to GHI Bulletin Supplement editor Patricia C. Sutcliff e, whose dedicated work added the ﬁ nal linguistic and stylistic polish to the manuscript. It was a wonderful and fruitful experience to work with all of the people involved in the project.

BERGHOFF AND SPIEKERMANN | INTRODUCTION 15

The Analysis of Immigrant Entrepre- neurship

The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

ENTREPRENEUR BIOGRAPHIES AS MICROHISTORIES OF X

Jürgen Finger

In 2009/10, I spent many weeks in a former beverage market in Bielefeld, Germany.1 The warehouse — as well as I myself — was cooled down to 60° F in order to guarantee optimal conditions for the storage and preservation of the archival and material legacy of Dr. Oetker. This well-known German consumer product brand unites under its umbrella the production of various foodstuff s — this was the origin of the company, which is well known in the U.S. and Canada as a heavyweight in the frozen pizza market — as well as beer and non-alcoholic beverages; wine, sparkling wine and spirits; an ocean carrier (the Hamburg Süd group); a renowned private bank and luxury hotels. Together with two colleagues of mine, Sven Keller and Andreas Wirsching, I had the chance to take materials of my choosing from the long rows of shelves and to have a work station in the archival warehouse, with the most interesting sources within arm’s reach. However, in the long run 60° F proved to be way too chilly for me.

Aft er numerous journeys to communal, state and private archives, we were able to write a comprehensive history of Dr. Oetker in the 1 The author gratefully ac- 2 era of the two World Wars. The book tells a company’s history. It knowledges funding by also tells the story of a family. Finally, the book tells the story of two the German Academic Exchange Service (DAAD) men: Rudolf-August Oetker, the third-generation heir of the family with resources of the business born in 1916; and Richard Kaselowsky, his stepfather, who European Union’s Marie Curie Actions and the replaced Oetker’s biological father not only in the family but also in Federal Ministry of Educa- tion and Research, grant the role of the — albeit temporary — patriarch of the family business. no. 605728 under FP7- Kaselowsky was a circumspect and successful entrepreneur who was PEOPLE-2013-COFUND. prepared to step aside at the moment young Rudolf-August Oetker 2 Jürgen Finger, Sven Keller, was ready to assume his inheritance. Up until then, Kaselowsky ma- and Andreas Wirsching, Dr. Oetker und der Natio- neuvered the fi rm through the hyperinfl ation, the Great Depression, nalsozialismus: Geschichte and a wartime economy. He also was a Märzgefallener, a March violet eines Familienunternehmens 1933-1945 (Munich, 2013). or March windfall, who compliantly adapted to the Nazi ideology in early 1933 and soon became an ardent admirer of Adolf Hitler. Finally, 3 Jürgen Finger and Sven Keller, “Erhalt als Erfolg: he became member of the Circle of Friends of the Reichsführer SS, Richard Kaselowsky an Heinrich Himmler.3 der Spitze des Familienun- ternehmens Dr. Oetker,” in Unternehmer — Fakten These two biographies, mapped out separately in two long chapters, und Fiktionen: Historisch- are central pillars to the edifi ce of our book, supporting the business biographische Studien, ed. Werner Plumpe (Munich, story, the family story and the political story. They represent two 2014), 143–67.

FINGER | MICROHISTORIES 19 sequences of life, two generational dynamics: although they are linked one to another and both to the family business, each is of individual interest with its own intrinsic value.

Yet, the broad and diff erentiated research on Nazi economics and German businesses during the interwar period and World War II that already existed made us question why we should write another study.4 Was it necessary to narrate the curriculum vitae of these successful entrepreneurs and emphasize their personal “assets”; to reﬂ ect, once again, on the politicization of business, of social and private life; to again test the limits of economic rationality in a dictatorial and hawkish political system?

One strategy to cope with this problem was to expand the ﬁ ndings of the individual case to relevant economic contexts and processes and to the concerned social groups, that is, to understand the biographies as studies of lives and times. The ascent of Dr. Oetker, for example, runs parallel to the emergence of the consumer goods industry and to the implementation of new consumer practices in the late nineteenth and early twentieth century.5 To give a second example: By constructing Richard Kaselowsky’s life course as a form of bourgeois

4 Norbert Frei and Tim self-mobilization in favor of the Nazi regime, his biography took on Schanetzky, eds., Unternehmen scholarly relevance beyond the dealings of this medium-sized family im Nationalsozialismus: Zur 6 Historisierung einer Forschungs- business in Eastern Westphalia. konjunktur (Göttingen, 2010). As with any case study, one can question its representativeness. 5 Finger, Keller and Wirsching, Dr. Oetker, 17–18. More generally speaking, one can challenge the epistemological modus through which entrepreneur biographies — as well as stud- 6 Ibid., 411–15. ies on individual ﬁ rms — get linked to more general questions of 7 I would like to thank Sven Keller (Institute of Contempo- scholarly interest. This challenge can be described in various ways: rary History in Munich/Berlin), the problem of representativeness, the quest for generalization or the who is a veteran discussion partner of mine for problems establishment of a link between micro and macrolevels. This problem of economic and business his- inspired the present paper, which attempts to conceptualize the link tory. The second part of this paper is partially indebted to a between the individual biographical case and more general questions piece we wrote for a conference via the concept of microhistory.7 on Bavarian honorary council- ors of commerce. It covers the range of biographical topics in I will not give an account of the suspicions voiced by academic a similar yet not identical way: historians towards the genre of biography. This reluctance today is Jürgen Finger and Sven Keller, “Erfolgsgeschichten? Über das particularly widespread in the economic and business history com- Schreiben von Unternehmer- munity, where many scholars are eager to renounce naïve heroic biographien,” in Die bayerischen Kommerzienräte: Eine deutsche legends of self-made men (rarely self-made women). They favor Wirtschaft selite von 1880 bis model-based approaches and a thorough theoretical foundation for 1928, ed. Marita Krauss (Munich, 2016). their work, allowing them to cozy up to either economics or general

20 GHI BULLETIN SUPPLEMENT 12 (2016) The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

historiography.8 Furthermore, I will not deliver a recipe or assembly instructions for writing an entrepreneur biography with scholarly validity. Microhistory does not present a solution to the micro/ macro-link problem, because microhistorians themselves have not found a universal answer to this question in the last fi ft y years. 8 Simone Lässig, “Biography in Modern History — Rather, I want to use microhistorical concepts to generate sensitiv- Modern Historiography ity for the epistemological problems and narrative pitfalls of the in Biography,” in Biogra- phy between Structure and biographical genre, and, in a second step, to give an introduction to Agency: Central European the broad spectrum of research questions that may go way beyond Lives in International Historiography, ed. the chronological sequence of a biographical subject’s life course. Simone Lässig and Volker R. Berghahn (New York, Oxford, 2008), 1–26, 1–7 Aft er presenting a brief overview of the methodological foundations for general remarks on of microhistory, in this paper I evaluate publications on German historians’ widespread skepticism towards biog- sweets manufacturer Gebrüder Stollwerck AG as examples of micro- raphies. The almost natu- histories of globalization and of kinship in entrepreneurial families. ral certainty of Wilhelm Treue, who without much In a third step, I examine the specifi cs of entrepreneur biographies, ado associated business paying particular attention to their narrative structure, as they tend history and the biographical method, seems lost to explain developments from within the black box of the entrepre- today: Wilhelm Treue, “A neur or his family. I suggest avoiding such pitfalls of the biographi- Journal for Company His- tories and Entrepreneurial cal method by linking the life of the subject to a reference value, Biography,” Business to a research question that, in the best case, provides an experi- History Review 31 (1957): 323–36. Even those who mental cardinal point outside of the object of study. In this sense, prefer not to refl ect too biographies — as well as case studies on companies — can be un- deeply about the nature of scholarly biography do derstood as microhistories of X. at least advocate an align- ment of business history in general and the biographical method in Microhistory, an Approximation particular as a means of What is microhistory? The pioneer of microhistory Giovanni Levi providing empirical data for economics: Thomas A. once avoided giving a clear-cut defi nition or developing a manifesto. Corley, “Historical Biogra- 9 phies of Entrepreneurs,” He claimed that microhistory was a “historiographical practice.” in The Oxford Handbook In a sort of circular reasoning, one could state that microhistori- of Entrepreneurship, ed. Marc Casson, Bernard ans know they are microhistorians if they do microhistory. In fact, Yeung and Anuradha a uniform theoretical and conceptual basis was never developed Basu (Oxford, New York, 2008), 138–60, 151–52. for microhistory. As it favored individual research, institution- For current considerations alization was limited. Researchers and projects oft en coalesced on the problem, see Uwe Spiekermann’s paper around periodicals such as the Italian Quaderni storici or the German “Why Biographies” in this Historische Anthropologie. volume.

9 Giovanni Levi, “On Micro- As a general rule, the foundations were laid in the 1970s and 1980s history,” in New Perspectives by studies on premodern and early modern European history. Carlo on Historical Writing, ed. Peter Burke (Cambridge, Ginzburg, Giovanni Levi, Emmanuel Le Roy Ladurie, Natalie Zemon 1992), 93–113, here 93, Davis and others wanted to overcome the macro-perspective of 95. Citations of French and German literature were structural and social history as advanced by inﬂ uential parts of the translated by the author.

FINGER | MICROHISTORIES 21 10 These groundbreaking studies Annales School or by the German Historische Sozialwissenschaft .10 are listed in chronological order: Emmanuel Le Roy Ladurie, Inspired by cultural history and by off shoots of social history, such Montaillou: Village occitan de as the history of everyday life (Alltagsgeschichte, histoire du quotidien) 1294 à 1324 (Paris, 1975); Carlo Ginzburg, Il formaggio and history from below, microhistorians focused on local, everyday, e i vermi (Turin, 1976); and commonplace objects of study. Oft en, they were intrigued and Natalie Zemon Davis, The Return of Martin Guerre inspired by exceptionally rich sources on singular persons and events, (Cambridge, MA, 1983); which they then studied in depth. The goal, however, was not a Giovanni Levi, L’eredità immateriale: Carriera di un esorcista sequential account of a life course or a most detailed histoire événe- nel Piemonte del Seicento (Turin, 1985); Alain Corbin, mentielle. Neither the biography nor the story of a “real unheard-of in- Le monde retrouvé de Louis- cident” were ends in themselves, but they aimed at a more thorough François Pinagot: Sur les traces 11 d’un inconnu 1798-1876 understanding of past lives, societies, and worldviews. Driven by an (Paris, 1996). In rare cases, intrinsic desire to develop more complex and plural historical narra- women have been placed at the center of these studies, tives, microhistorians, moreover, doubted the explanatory power of e.g., Laurel Thatcher Ulrich, entities and concepts like nation, state, or progress.12 A Midwife’s Tale: The Life of Martha Ballard, Based on Her Diary (1785-1812) (New For Carlo Ginzburg, the “reduction of scale in observation (not of York, 1991). For microhistory’s the object of investigation)” is the central operation of microhistory. place in the history of historiography, see Georg G. He urges the researcher to study one single case as intensely as Iggers and Q. Edward Wang, possible and — referring to ethnologist Marcel Mauss — to use it A Global History of Modern Historiography (Harlow, 2008), as a starting point for the generalization of both answers and (new) 250–81; and Lutz Raphael, questions.13 Jacques Revel’s postulate that microhistory’s procedure Geschichtswissenschaft im Zeitalter der Extreme: Theorie, is like gaming with scales, a “jeu d’échelles,”points in a similar di- Methoden, Tendenzen von 1900 rection: The scale of historical study should be changed constantly bis zur Gegenwart, 2nd ed. (Munich, 2010), 96–116, and consciously, so that the historian can construct complex objects 173–95, 239–40. and describe the fl aky ( feuilleté) structure of the social tissue. “What 11 “Eine sich ereignete unerhörte counts is the principle of variation, not the choice of a particular Begebenheit” refers to Johann 14 Wolfgang von Goethe’s concept scale.” Providing metaphors from photography and cartography, of a novella, which emphasizes Revel states: “Changing the focal length not only means making the mixture of factuality and extraordinariness: “Gespräch things appear bigger (or smaller) in the viewfi nder; it also means mit Eckermann, 29. Januar modifying the object’s form and background.” Likewise, changing the 1827,“ in Johann W. Goethe, Sämtliche Werke nach Epochen scale in cartography not only modifi es the size of the map or the map seines Schaff ens: Münchner Ausgabe, Vol. 19: Johann Peter Eckermann, Gespräche » Geschichte in 2010 [Balzan] Awards “Giochi di Scala” (2006). mit Goethe in den letzten Wissenschaft und Ceremony in Rome,” in Revel did not mean the Jahren seines Lebens, ed. Heinz Unterricht 45 (1994): 2010 Balzan Prize for Eu- game “Jeu d’échelles,” Schlaff er (Munich, 1986), 203. 347–67, 348–54; Richard ropean History (Milan, known as “Serpents et van Dülmen, Historische 2010), 9–17, 13–14. échelles” or “Snakes and 12 On the historical context and Anthropologie: Entwick- ladders.” This reference examples, see Hans Medick, lung, Probleme, Aufgaben 14 Jacques Revel, “Micro- would provide only a poor “Mikro-Historie,” in Sozialge- (Cologne, 2000), 95–98. analyse et construc- metaphor for success and schichte, Alltagsgeschichte, tion du social,” in Jeux failure in history and — Mikro-Historie: Eine Diskussion, 13 Carlo Ginzburg, “Some d’échelles: La microanalyse in our case — in entre- ed. Winfried Schulze Queries Addressed to à l’expérience, ed. idem preneurial life, since the (Göttingen, 1994), 40–53, Myself: A Panoramic (Paris, 1996), 15–36, 19. roll of the dice decides 42–43; Otto Ulbricht, Synthesis of His Career, The Italian title makes the players’ moves on “Mikrogeschichte: Versuch Realized by Carlo Ginzburg, the understanding of the fi xed structure of the einer Vorstellung,” » on the Occasion of the échelle=scale clearer: gameboard.

22 GHI BULLETIN SUPPLEMENT 12 (2016) The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

section, but also the content of the map, the selection of information that can be represented.15

Hans Medick gives a more hands-on defi nition of microhistory as an “experimental investigation into networks of social relations and contexts of action” that takes “social, economic, cultural and political conditions” into account. These conditions infl uence the networks 17 Levi, “Microhistory,” 94–95, 106–107, with and vice versa. “By avoiding preexisting categorizations such as the a philosophical touch: family, the individual, the state, the industrialization, new insights „Thus all social action is seen to be the result of an into the constitution of historical structures, but also in short- individual’s constant ne- term and longer-term processes are opened up.”16 In the end, most gotiation, manipulation, choices and decisions in microhistorians agree on focusing on human behavior in a particular the face of a normative re- historical context that is — at least partially — constituted by just ality which, though 17 pervasive, nevertheless these humans. In such a “history of the whole in all its particulars” off ers many possibilities (“Detailgeschichte des Ganzen”), the biographical method, just as for personal interpretations and freedoms. The 18 other qualitative and quantitative methods, has its place. question is therefore, how to defi ne the margins — Critics of microhistory intuitively drew an analogy from the scale however narrow they may be — of the freedom of the research object to the scope of the analytical question and granted an individual by thus to the relevance of a study. They confused the investigation the interstices and contra- dictions of the normative area and the object of investigation, and insisted that local history systems which govern him. could only have local relevance. But, to cite Cliff ord Geertz, “the In other words, an enquiry into the extent and nature locus of study is not the object of study.”19 Geertz shift ed atten- of free will within the general structure of human tion from the spatial limitation, deplored by his critics, to a set of society.” (94–95) relationships, interpretations, and constructions. One might even 18 E.g. the family reconstitu- amend Geertz’s oft -cited statement: The locus of study is not the tion method employed by object of study, and the latter is not the subject matter studied (the Medick, who integrated all available qualitative and topic). Since a binary coding of local/global, top/bottom, important/ quantitative data on the insignifi cant would be misleading, all scales are equivalent; none inhabitants of Laichin- gen in one huge database. grants privileged access to history. The global scale is not more Hans Medick, Weben und relevant; the local scale is not more authentic or more immedi- Überleben in Laichingen 1650-1900: Lokalge- 20 ate. An analytical gain is ensured by the changing of the scales, schichte als Allgemeine Ge- by the change of perspectives, which can produce alienation eff ects schichte (Göttingen, 1996), 21–30, where Medick is (estrangement, dépaysement). referring to Michel de Certeau’s concept of “science of singularity”; 15 Ibid. hier eine experimentelle und Verhältnisse, die p. 24 for the citation. Untersuchung sozialer in und mit ihnen, durch 16 Medick, “Mikro-Historie,” Beziehungsnetze und und auch gegen sie zur 19 Cliff ord Geertz, The Inter- 45: “Statt einer vorwe- Handlungszusammen- Äußerung und Wirkung pretation of Cultures (New ggenommenen Katego- hänge, freilich nie nur in kommen. Dadurch York, 1973), 22. risierung in Form der Fixierung auf diese werden neue Einsichten unterstellter makrohis- selbst, sondern immer in die Konstituierung his- 20 Jacques Revel, “Présen- torischer Substanzen auch im Blick auf die ge- torischer Strukturen, aber tation,” in Revel, Jeux (die Familie, das Indivi- sellschaft lichen, ökono- auch in kurz- und länger- d’échelles, 7–14, 12–13. duum, der Staat, die In- mischen, kulturellen und fristige historische Proz- Revel, “Micro-analyse,” dustrialisierung) erfolgt politischen Bedingungen esse eröff net.“ 26, 34.

FINGER | MICROHISTORIES 23 Microhistory neither rejects theories nor confi nes itself to a self- 21 Medick, Weben und Überleben, 13–16, 20–24. Another classic contained narrative on local incidents and singular events. The local example is David Warren or individual level is interlinked with the regional, national, or even Sabean, Property, Production, and Family in Neckarhausen transnational and global levels. For example, Hans Medick charac- 1700–1870 (Cambridge, 1990). terized his “local history” of the Württemberg village Laichingen as 22 Hartmut Berghoff , a “microhistorically grounded general history,” which, for example, “Unternehmensgeschichte made valuable insights into the history of proto-industrialization als Gesellschaft sgeschichte: Konzeptionelle Grundüberle- possible.21 In an analogous formula, Hartmut Berghoff wrote a “busi- gungen am Beispiel des Aufstiegs Hohners vom ness history as a history of a society” (“Unternehmensgeschichte als Geheimgewerbetreibenden Gesellschaft sgeschichte”) in his study on the accordion manufacturer zum kleinstädtischen Groß- 22 industriellen,” in Kulturalismus, Hohner. Thus, microhistorians, while keeping in mind existing Neue Institutionenökonomik theories and the state of research, try to ensure the experimental oder Theorienvielfalt: Eine Zwischenbilanz der Unterneh- character of their studies; the practice encourages their intellectual mensgeschichte, ed. Jan-Otmar freedom as they construct their narratives.23 Hesse, Christian Kleinschmidt and Karl Lauschke (Essen, 2002), 243–51; ibid., Zwischen However, as the diff erent scales of history are not continuous, there is Kleinstadt und Weltmarkt: no direct way of generalizing the results of microanalysis, of elevating Hohner und die Harmonika 1857–1961. Unternehmens- them to the macro level. The micro constellation cannot be infl ated geschichte als Gesellschaft sge- like a balloon in order to get a macro picture. Or, as Alban Bensa put schichte, 2nd ed. (Paderborn, 24 2006), 13–48. it: Microhistories don’t stand pars pro toto. Translating the particular to the general level proves to be the major epistemological problem 23 Medick, “Mikro-Historie,” 44–45. Levi gives an example of microhistory. To a certain extent, no solution to this problem has of why a specifi c openness can ever been found. further our knowledge. Refer- ring to his study on “L’eredità immateriale,” he explains that Jacque Revel reduces the problem in his preface to the French version the idea of a market where prices are determined by sup- of Levi’s “Le pouvoir au village” to a provocative phrase: “Why make ply and demand is anachro- things simple when one can make them complicated.” Giovanni Levi nistic as it transfers today’s commonplace knowledge to seems to agree with him; however, his harsh solution — the unique- sixteenth-century Italy. Yet, ness of the particular cannot be generalized; the particular may not a thorough investigation into 25 transfers of property rights be sacrifi ced — is not satisfying intellectually. Other exponents of on land showed that to a re- microhistory and historical anthropology also repudiate the idea markable extent the price level depended on the timing, dif- of generalization and prefer studies on the microlevel. In a more ferent forms of transfer and, tempered approach, some point out that only on the microlevel can especially, kinship. Levi, “Microhistory,” 97–98. a strong causal nexus be examined, but the micro itself then creates its macrostructures. Historian Angelika Epple suggests that the local and 24 Alban Bensa, “De la micro- histoire vers une anthropolo- the translocal dimension should always be the starting point of an gie critique,” in Jeux d’échelles, analysis of overarching structures (regional, national, cultural, global).26 ed. Revel, 37–70, 58–62.

25 Jacques Revel, “L’Histoire au Ras du Sol,” preface to Levi, » of this position, wherein Dingen, Siegfried Kracauer Epple, “Lokalität und die Le Pouvoir au Village: Histoire meso- and macro- Werke, vol. 4 (Frankfurt Dimensionen des Glo- d’un Exorciste dans le Piémont strucutres are only seen am Main, 2009), 128. balen: Eine Frage der du XVIIème Siècle (Paris, 1989), as derivatives of the small Relationen,” Historische i-xxxiii. Levi, “Microhistory,” entity. Siegfried Kracauer, 26 Jacques Revel, “Présen- Anthropologie 21 (2013): 109–10. Kracauer disapproves » Geschichte: Vor den letzten tation,” 12–13; Angelika 4–25.

24 GHI BULLETIN SUPPLEMENT 12 (2016) The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

The micro/macro-link also generates concerns for the structure of a study: Representativeness is diffi cult or even impossible to achieve, as microhistories oft en depend on exceptionally rich and dense sources and on the curiosity of individual historians. Even if possible, the sheer multiplication of studies with a similar layout would produce pointless redundancies. Looking for analogies on diff erent scales would also be misleading as we tend to ﬁ nd what we are looking for: Moreover, the logics of agency, social relations, or representation on diff erent levels of analysis are incommensurable. Finally, the idea of mutual pervasiveness of micro- and macrolevels, stated by sociologist and cultural critic Siegfried Kracauer in a posthumous manuscript, is intellectually interesting, but it is not very helpful for the pragmatics of historiography.27

Even if one does not agree with these diff erent preferences and simply sticks to Revel’s idea that no scale is to be preferred and that each should be examined in its own right, the great challenge remains to examine the interaction of individuals within diff erent social systems on diff erent scales.28 Probably, the micro/macro-problem can only be solved in a distinct way within each single study.

An Example: Gebrüder Stollwerck AG Diff erent publications on the Gebrüder Stollwerck AG can illustrate the opportunities and challenges but also the pitfalls of entrepreneurial microhistory. Stollwerck, founded in 1839, was a German, family-owned joint-stock company until banks took over the majority in 1932 as a consequence of the Great Depression. From the 1890s, Stollwerck was a multinational sweets manufacturer and one of the then biggest market players in the U.S. Its business model relied especially on vending machines, which represented both an effi cient and trendy new distribution channel. The global commodity fl ows of cocoa and the ascent of modern consumer practices make Stollwerck an interesting object of study. 27 Kracauer, Geschichte, Angelika Epple in her 2010 book explicitly suggests reading the fam- 128–43, here 135. Medick, Weben und Überleben, ily’s and fi rm’s history as a “microhistory of globalization.” Instead of 30–32. composing a master narrative along the lines of Christopher Bayly,29 28 Levi, “Microhistory,” she combines globalization with the allegedly confl icting method- 96–97. ology of microhistory by analyzing Stollwerck in its transnational 29 Christopher Alan Bayly, interconnections over the course of almost a century. She bases her The Birth of the Modern analysis on various macroconcepts, thereby framing her study in World, 1780-1914: Global Connections and Compari- advance: the end of the era of nation-states replaced by multinational sons (Malden, MA, 2004).

FINGER | MICROHISTORIES 25 corporations (Alfred D. Chandler/Bruce Mazlish); globalization as economic, social, and cultural homogenization (Anthony Hopkins/ George Ritzer), which is counterbalanced by cultural heterogeneity and regionalization — or in fancier terms: glocalization (Ronald Robertson) and hybridity.30

Epple proposes to transcend the one-sided coding of economic 30 Angelika Epple, Das Un- globalization, on the one hand, and cultural bonds with strong lo- ternehmen Stollwerck: Eine Mikrogeschichte der Globali- cal ties, on the other hand — an assumption that is oft en present sierung (Frankfurt am Main, in the idea of glocalization. She focuses on the dynamic interplay 2010), 13–35. of the various local and global, economic and cultural dimen- 31 Epple, Das Unternehmen sions: how do they mesh, how are they mutually interdependent, Stollwerck, 25–27, 320–25. Hartmut Berghoff describes a how do they blend, how do they obstruct and how do they hustle similar constellation without such neologisms: Berghoff , things on? Yet, the interplay between global and local sometimes Zwischen Kleinstadt und remains abstract. This is evident in the way she describes the Weltmarkt, 209–20, 143–45. Some of Epple’s fi ndings are family structure and the governance by the second Stollwerck gen- more conventional: Economic eration. The transposition of ideas of global “homogenization” and rationality can be identifi ed only in hindsight; the frater- “heterogeneity” to the family level und to the level of corporate nalist structure necessitates governance strikes me as a problematic analogy of macro- and consensus, or, as she puts it, the horizontal production micro-analysis. of homogeneity balances the heterogeneity of the frater- Epple presents the network of fi ve brothers sharing the management nal management. Epple, Das Unternehmen Stollwerck, 23, of the family enterprise and performing in horizontal modes of op- 412–16. eration. Yet, the scope of this “fraternalism” seems to be limited as 32 Ibid., 45–46. it complements the hierarchical structure of patriarchalism towards further stakeholders outside of the fraternal bubble. The concept em- 33 Cf. the review by Julia Laura Rischbieter, “Das phasizes the relation within the (family) management at the expense Unternehmen Stollwerck of their relations — as individuals or as a collective body — towards [Review],” WerkstattGeschichte 59 (2011): 116–18. workers, business partners and, more generally, their social and 31 34 Angelika Epple, “‘Global economic environment. History’ and ‘Area History’: Plädoyer für eine Epple voluntarily limits not only her focus but also her choice of weltgeschichtliche Perspektivierung des sources: By putting at the center of her considerations all things Lokalen,” in Area studies global and by focusing on the correspondence between identifi - und die Welt: Weltregionen und neue Globalgeschichte, able stakeholders, grouped around the fi ve Stollwerck brothers, ed. Birgit Schäbler (Vienna, she strictly frames the picture and probably accepts microhistorical 2007), 90–117, 113. Epple’s 32 formula is similar to a series of blind spots. Processes sometimes remain abstract; the interplay microhistorian’s set phrases of the diff erent levels is diffi cult to asses and to narrate. Epple gives that play with the fact that the paradox is elevated to meth- an interesting micro analysis of “fraternalism” but the nexus to the odology. For example, Giovanni macrolevel remains sketchy, for example, in the way the invisible Levi paraphrased Cliff ord Geertz: “Historians do not hand of globalization occasionally seems to guide the family mem- study villages, they study in bers’ action.33 No doubt Epple followed advice she gave some years villages.” Levi, “Microhistory,” 96; Geertz, Interpretation, 22. earlier: “think globally, study the local.”34

26 GHI BULLETIN SUPPLEMENT 12 (2016) The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

Another way to construct a microhistory of globalization was presented by Julia Laura Rischbieter. Her actor-centered historical analysis, presented as a “micro-economy” of globalization, focuses on a number of stakeholders of the Hamburg coff ee trade, who did not directly act on the international level. In this way, Rischbieter makes sure that her analysis does not presuppose the processes of globalization and its long-distance eff ects on the local level.35

In a certain way, another book on Stollwerck delivered an excellent example of what microhistory can achieve — without calling it microhistory. Tanja Junggeburth linked the perspective of business history to the history of the middle classes (Bürgertumsforschung) by taking into account concepts of the New Institutional Economy, the interlocking of capital forms (Pierre Bourdieu), and the idea of a horizon of bourgeois values (“bürgerlicher Wertehimmel” according to Manfred Hettling and Stefan Ludwig-Hoff mann). Junggeburth can show how — to diff erent degrees during a sequence of three generations — kin and business interests were interlocked by bourgeois values and common interest. As one might expect, especially the transfer of property rights to the next generation engendered conﬂ ict and dissatisfaction among all stakeholders.36

In a third monograph on Gebrüder Stollwerck AG, the example is used in a completely diff erent way. Its analysis helps us to better demarcate microhistory from another widespread method of gaining and representing knowledge in human science: the case study. Alfred D. Chandler presents in “Scale and Scope” (1990), meanwhile a still infl uential classic, the family fi rm as an example of cooperative managerial capitalism. Yet, his analysis is strongly streamlined to make the case fi t the concept. Stollwerck represents a case study, 35 Julia Laura Rischbieter, oriented to a specifi c generalization wanted by Chandler: the empiri- Mikro-Ökonomie der Globalisierung: Kaff ee, cal work was limited, and similar to the ceteris paribus assumption, Kaufl eute und Konsumenten neighboring aspects were not assigned relevance, so that essential im Kaiserreich 1870-1914 37 (Cologne, Weimar, Vienna, contexts were not represented in the picture. In contrast, the micro- 2011), 8–10, 17–20. historian’s approach would — to take the metaphor further — destroy 36 Tanja Junggeburth, the picture frame. Stollwerck 1839-1932: Unternehmerfamilie und Yet, it is legitimate to ask whether one needs to resort to the con- Familienunternehmen (Stuttgart, 2014), cepts of microhistory and to its sometimes fl abby methodology. 27–35. Couldn’t one simply call each biography a case study? Certainly not. 37 Alfred Dupont Chandler, The Chandler example demonstrates that the relation between the Scale and Scope: The Dy- particular and the general is diff erent with case studies. Case studies namics of Industrial Capi- talism (Cambridge, MA, are the traditional instrument for the production, the verifi cation, London, 1990), 398–409.

FINGER | MICROHISTORIES 27 and the representation of knowledge in medicine, law, and the social sciences. The idea is to exemplify structures and processes, oft en already known or deduced from systematic knowledge. This refers also to techniques of subsumption by classifying individual cases under general rules or within a typology (of maladies, of legal provisions), and to techniques of training (e.g., the business education developed by Harvard Business School in the 1920s).38 In order to clarify the wording, one should not speak of “the case of A” when speaking of a case study. Instead, we should prefer to speak of “A as a case of B,” A being the particular and B being the general or the ideal type in a Weberian sense. Both relate to each other in a well deﬁ ned way by the act of representation.

38 Therefore, the narrative structure is at the heart of research Interim Wrap-up: Microhistories of X on the methodology of case studies, presented by The microhistorical method, in contrast, is not looking for an il- science history and cultural lustration of existing generalizations. Biographies should not be studies. Johannes Süßmann, “Perspektiven der Fallstudien- “commemorative and therefore confi rmative,” chosen only on the forschung,” in Fallstudien: basis of existing knowledge and already established judgments on Theorie — Geschichte — Me- 39 thode, ed. Johannes Süßmann, their subjects’ relevance. Theories may be used as a starting point, Susanne Scholz and Gisela but the goal is neither to exemplify a general rule nor to construct a Engel (Berlin, 2007), 7–27, 19–22; Susanne Düwell and (new) typology. Microhistory tends to dissolve boundaries between Nicolas Pethes, “Fall, Wissen, the parts and the whole; the relation between the general and the Repräsentationen: Epistemol- ogien und Darstellungsästhe- particular is at best dialectical.40 The interlinkage between micro- and tik von Fallnarrativen in den macrolevels in the construction of a project, as well as the interlink- Wissenschaft en vom Men- schen,” in Fall — Fallgeschichte — age in the narration of its results, seem to remain two major problems Fallstudie: Theorie und Geschichte einer Wissensform, of microhistory that can only be solved from case to case. ed. Susanne Düwell and Nicolas Pethes (Frankfurt am Main, To sum up: New York, 2014), 9–33. Inte- grating the history of science, literary studies, and moral phi- 1) The locus of study is not the object of study, and the latter is losophy: Lucia Aschauer, Horst not the subject matter studied (freely adapted from C. Geertz). Gruner and Tobias Gutmann, 2) Insight is produced by the conscious variation of the scale eds., Fallgeschichten: Text- und Wissensformen exemplarischer and of the perspective of study, which can produce alienation Narrative in der Kultur der eff ects (Ginzburg/Revel). Moderne (Würzburg, 2015); Jean-Claude Passeron and 3) But, there is no continuous transition from the micro- to the Jacques Revel, eds., Penser par macrolevel: The fi rst doesn’t stand pars pro toto for the latter cas (Paris, 2005). (Bensa). Therefore, microhistory also is incompatible with the 39 Hans Renders and Binne de epistemology of classifying case studies. Haan, “Limits of Represen- 4) Biographies as well as the story of a real unheard-of incident tativeness: Biography, Life Writing and Microhistory,” are not ends in themselves. Storia della Storiografi a 59-60 5) Microhistorically grounded biographies have to relate to a (2011): 32–42, 33–34. cardinal point outside of the object of study. The experimental 40 Levi, “Microhistory,” 106. character (Medick) is ensured by the biographer who chooses

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the cardinal point as freely as possible, regardless of existing judgments on the subject’s life and his presupposed historical relevance or even irrelevance. In this sense, biographies can be perceived as microhistories of X. Although a broader subject matter is maintained when scaling down on the individual object of study, the links between the diff erent levels need to be determined in the process of research. The analytical perspective thus oscillates between the various levels.

Medium-range Perspectives This part of the paper suggests ten abstract dimensions of biographical study, of which some are specifi c to entrepreneur biographies. Of course, the list is not exhaustive.41 The perspectives are open to adaptation, and they are compatible, for example, with concepts of New Institutional Economics in business history, like property rights, transaction-cost theory, modes of governance, bounded rationality, etc. However, these are not at the center of my current 41 A diff erent, more specifi c 42 set of research questions considerations. The dimensions should be seen as interconnected. has been proposed for Investigation into the unique setting of these factors is a diffi cult but the GHI Washington’s project on “Immigrant promising goal for an entrepreneur biography. Entrepreneurship”: Hartmut Berghoff and 1. Family and kin: This perspective is thoroughly connected to all of Uwe Spiekermann, “Im- migrant Entrepreneurship: the following. Family can be seen as either a stabilizing and desta- The German-American bilizing factor in an entrepreneur’s life, or both at the same time. Business Biography, 1720 to the Present. A GHI Re- An analysis of the diff ering logics of family and business not only search Project,” Bulletin provides valuable insight into structures and relations within the of the German Historical Institute 47 (2010): 69– two entities. It can also help to explain confl icts arising from the 82, here 76–80. Another integration of the two rationales. Family also can include the rela- hands-on collection of research topics can be tions to other stakeholders like members of the management, major found in Jürgen Finger and Sven Keller, shareholders, and even competitors (e.g., Adidas/Puma). “Erfolgsgeschichten?”

The key challenge for a biographer is to “keep family, household, kin, 42 Clemens Wischermann et al., eds., Studienbuch property, inheritance and production ﬂ exible in such a way that they institutionelle Wirtschaft s- never appear to be rigid categories or mere structuralist concepts but und Unternehmensge- schichte (Stuttgart, 2015). can always be recognized as intersections of social actions.” In other words: “Family happens” since persons (and things!) are intercon- 43 Thomas Sokoll, “Familien hausen: Überlegungen zu nected by emotions and interests, constituting a dynamic and inti- David Sabeans Studie über mate tension ﬁ eld with complicated and reciprocal dependencies.43 Eigentum, Produktion und Familie in Neckarhausen 1700–1870,” Historische Family — just like other social institutions, which between the lines Anthropologie 3 (1995): of historiographical texts oft en appear as immutable, a priori, ahis- 335–48, 339–45, praising the seminal monograph by torical in a certain sense — is less precisely limited than commonly Sabean, Property.

FINGER | MICROHISTORIES 29 assumed: Who is part of the family and who is not? Why? Is the affi liation contested? How and when do affi liations and assignments 44 Simone Derix analyzes the change?44 Similar things could be said of other categories already affi liation problem within the Thyssen family, a trans- mentioned (nation, society, local/immigrant/religious, community, national wealthy family par etc.), which oft en frame our interest. Is the enterprise defi ned only by excellence, and gives further insight into scholarly research corporate law and property rights, or does the entrepreneur perceive on families: Simone Derix, Die his economic endeavor as wider, more complex, and multifaceted?45 Thyssens: Familie und Vermö- gen (Paderborn, 2016). 2. Family and kinship refer to the wider phenomenon of private life. 45 Werner Plumpe, “Unternehmer — Fakten und Entrepreneurs are not (at least not always) monomaniacial economic Fiktionen: Einleitung,” in heroes.46 Family and friends present not only a mere enabling struc- Unternehmer, ed. idem, 1–26. ture for business, delivering comfort, heirs or occasions for recovery. 46 Werner Plumpe, “Funktionen Contrary to what such a functionalist view suggests, private life has a der Unternehmerschaft : Fiktionen, Fakten, Realitäten,” rationale of its own, or even more than one rationale: family, friends, in Unternehmertum: Vom extramarital aff airs, hobbies, etc. Gender roles and gender relations Nutzen und Nachteil einer ris- kanten Lebensform, ed. Ludger can be one important perspective within this dimension, as they Heidbrink and Peter Seele structure the family and the business sphere, and shape ideas of (Frankfurt am Main, 2010), 43–60, 55–56. For prob- economic masculinity and femininity. lems of defi ning an entrepreneur in the emphatic sense, 3. Emotions: The objective of a biographical approach cannot be to as proposed, e.g., by Joseph Schumpeter: Werner Plumpe, unduly psychologize the entrepreneur, his behavior, or his opinions “Unternehmer — Fakten und on political, business, or personal issues. Oft en, adequate sources are Fiktionen: Einleitung,” 8-11, 13-14, 22-25. Boris Gehlen, not available, and the methodology of psychohistory is virgin soil for Paul Silverberg (1876-1959): Ein Unternehmer (Stuttgart, most biographers, who occasionally are seduced by speculative lay- 2007), 24, gives a less em- man’s psychology.47 Nevertheless, we may not pass over experiences phatic defi nition: Entre- preneur is the name of the of success and failure (in private life, business, and elsewhere), over person,who has “decisive in- sentiments of pride, (self-)confi dence, or frustration. This is all the fl uence on strategic decisions in an enterprise, i.e., deci- more true as success and failure with all of their personal, structural sions that are eff ective in the and contingent causes constitute a central momentum in the life of long term (and who bears the 48 entrepreneurial risk), whereby an entrepreneur. These emotions may be handled with care, espe- he is in the formal and actual cially by avoiding any simplifying causal nexus. The concepts and position to delegate these decisions.” methodological considerations of a new history of emotions may be helpful in this context.49 47 Lässig, “Biography,” 11–12; Alexander von Plato, “Geschichte und Psychologie — 4. Business models: Experiences, formal and informal knowledge, the Oral history und Psychoanal- disposal of property rights, and cultural factors can shape business yse: Problemaufriss und Literaturüberblick,” Historical Social Research 29, no. 4 48 A businessman who Michael Frese, “Erfol- Plumpe, 81–96, (2004): 79–117; Nikolas R. stops being success- greiche Unternehmer”; 57–80, and 27–56, Dörr, “Zeitgeschichte, Psy- ful may not be an en- Alfred Kieser, “Braucht respectively. chologie und Psychoanalyse, trepreneur anymore: der Kapitalismus erfol- Version: 1.0,” Docupedia- Jürgen Kocka, “Braucht greiche Unternehmer: 49 Ute Frevert, “Was haben Zeitgeschichte 29.04.2010, der Kapitalismus erfolg- Oder: Warum werden Gefühle in der Geschichte http://docupedia.de/zg/ reiche Unternehmer, und immer mehr Unterne- zu suchen?,” Geschichte Zeitgeschichte_Psychologie_ wenn ja, gibt es sie?,” hmer charismatisiert?,” und Gesellschaft 35 und_Psychoanalyse. Sebastian Fischer and all in Unternehmer, ed. (2009): 183–208.

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models and forms of organization. Entrepreneurs may choose business models or forms of organization for their functionality or for context-sensitive and highly individualistic, even private, reasons. The formative inﬂ uence of the entrepreneur’s attitudes to (disruptive) innovation and risk, and his willingness to act proactively and with initiative, cannot be overstated. The social role of the entrepreneur cannot be separated from his or her enterprise. At the same time, the urge for autonomy is characteristic of the entrepreneurial lifestyle. Therefore, questions of organization, hierarchy, and deliberative processes may be a touchstone for the entrepreneur’s temper and self-image, as they relate to his/her capacity both for leadership and for tolerating reliance on others.

5. Transfers of knowledge not only refer to formal education but especially to knowledge about business practices, in particular, and social and cultural practices, in general.50 This can include transfers within the family, within industry, regional, or transnational networks, by migrating, or within a particular local, immigrant, or religious community.

6. Transfers of property rights refer to diff erent models for mobilizing social, cultural and economic capital, e.g., within kinship networks and across borders, cultures, and generations. The last case has proven to be a major problem especially with family businesses: The 50 Sandra Maß, Kinderstube prospect of future dynastical succession both intrigues and appalls des Kapitalismus? Mone- täre Erziehung im 18. und many founders who consider themselves irreplaceable. The handling 19. Jahrhundert (Munich, of an unscheduled, controversial, or poorly planned succession forthcoming). produces problems not only within the family but also within the 51 Simone Derix, “Transna- corporation or the network of business partners. tionale Familien,” in Di- mensionen internationaler Geschichte, ed. Jost Dülff er Both dimensions of transfer — knowledge and property rights — and Wilfried Loth (Munich, 2012), 335–51; relate to family and kin, which turned out to be important agents in David W. Sabean and the constitution of transnational networks.51 They also inﬂ uence the Simon Teuscher, “Re- thinking European Kin- constitution of business models or may resonate with the emotional ship: Transregional and category. Transnational Families,” and David W. Sabean, “German International 7. Embeddedness: The idea of embeddedness of economic activity Families in the Nineteenth refers both to social relations in a wide sense of the word (family and Century: The Siemens Family as a Thought Ex- kin, friendship, labor relations, business partners, and even competi- periment,” both in Trans- tors) as well as to the cultural embeddedness of markets, sectors, and regional and Transnational Families in Europe and business procedures. Beyond: Experiences since the Middle Ages, ed. 8. Space: The spatial dimension of a businessman’s or business- Christopher H. Johnson (New York, 2011), 1–21 woman’s life can be understood as his or her resonance space. It and 229-52, respectively.

FINGER | MICROHISTORIES 31 is deﬁ ned by the spheres of his or her private, social, political, and economic activity.

9. Temporality: The idea of taking into account the time of history not only reminds us to situate the object of a biography within a generational succession. It invites us to integrate historical change into the biographical narrative and to reﬂ ect on the relation of dynamics and stability, on periods of acceleration and deceleration, and on the possibility of diff erent “speeds” on the various biographical levels (business/family/politics, etc.). Important moments and decisions may be densely narrated, but they are not the only moments of change and dynamics; change over the long run may be as fundamental. Putting the focus on decisive moments can evoke the false illusion of biographical straightness, of an obstacle course from one point of culmination to another. Thinking about temporality may also remind us that the outcome of a decision is unknown to entrepreneurs as they make them.

The life courses of the biographical subjects were not linear — and their biographical depiction should not be either. Supposedly non- decisive phases in the lives of entrepreneurs should not be contracted inappropriately in biographical accounts. The diff erence between narrated time and narrative time hints at temporal gaps and distortions that are present in the (self-)representation of biographical subjects as well as in our own construction of their life tales. We do not need to renounce them as a means of representation, but we may choose them consciously.

10. (Self-)Representation: The self-image of biographical subjects as well as their outside perception and depiction can be important dimensions of biography. This includes the (self-) representation of entrepreneurs within their country of origin, within an immigrant, religious, or local community, or on other levels. Such narratives of self-made men and women versus nouveaux riches, and tales of rise and decline represent unspoken biographies written long before biographers started their work.

Examining these narratives and the ways biographies and even the memories of the subjects have been written, rewritten, and overwritten by the subjects themselves, by family, contemporaries or successors — like some sort of palimpsest — prevents us from unconsciously borrowing for our own historiographical narrative. This might be a particular pitfall in cases where ego-documents — although

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rare with businesspeople — exist and are made available to the researcher. They allow a rich and dense narration, they give coherent explanations for decisive moments that oft en are diffi cult to assess if written sources are missing and decisions were made only aft er oral deliberation. Thorough source critique can prevent biographers from overvaluing these instruments of self-historicization and from uncritically adopting the perspective of the person who ought to be the object of study.

Epistemological and Narrative Pitfalls Understanding entrepreneur biographies as microhistories “of X” can provide us with various epistemological reminders. First of all, microhistory reminds us of the pitfalls of the biographical method, which ought to be not (only) about giving a life story. Biographies tend to individualize corporate decisions, to reiterate the self-perception of businesspeople and their posture of omnipresent dominance within the enterprise. Biographies run the risk of retroactively reinforcing hierarchies as they oft en neglect forms of cooperation, shared responsibility, and joint management. Scholarly biographies should never be like a saint’s legend, focused on a heroic and monomaniacal entrepreneur. Such people might exist, but in most cases, historical reality is more complicated.

Apart from the problems of macro- and micro-levels, microhistory reminds us also that family, kinship and enterprise, local and immigrant communities, as well as local, regional, national, and transnational ﬁ elds of activity do not represent secluded and closed up islands. They are interconnected in manifold ways and on diff erent levels. If there were functional relations, they do not resemble a one-way street and were neither evident to the agents nor clear to us.

The problem of (self)-representation reminds us that there are preexisting ideas of how to arrange accounts of entrepreneurs’ lives, ideas that may even have infl uenced them, and that may predetermine our way of “reading” them, as well as their successes and failures: the ideal of a dynastical order; the idea of preserving an enterprise: not only wealth in an abstract way but a specifi c ensemble of property rights; the later rationalization of early failures, which are justifi ed by claiming learning eff ects, or by construing an acid test for the entrepreneurs’ ability to carry on and to make a new start; or, in contrast, complaints about allegedly irrational decisions, jeopardiz- ing the enterprise or complicating generation change in later years.

FINGER | MICROHISTORIES 33 Microhistory reminds us, ﬁ nally, to avoid or at least handle with care common narrative patterns that are oft en inspired more by literature and proverbs than by scholarly evidence. Such narratives may help researchers to cope with the complexity of an entrepreneur’s biography — but they tend to obscure more than they reveal. Kim Christian Priemel mentions at least four problematic topoi: “(a) social advancement from humble beginnings; (b) the ability to be a homo universalis [i.e., an all-round genius]; (c) the unity of man and work; and (d) individual frugality.”52

These are oft en integrated into two master narratives that were — and sometimes still are today — common: The myth of the founder tends to boil down the reasons of success to only one factor — the temper of the entrepreneur; his cleverness, agility, and skills. Most oft en, 52 For the following, see Kim C. this narrative is as monocausal as it is linear. Second, such founding Priemel, “Wider die Typolo- gie: Entrepreneure, Familien myths are integrated into a generational sequence. The subsequent und Manager — Flick 1912– generation oft en gets moralized, and false historical necessities are 1985,” in Familienunterneh- men im Rheinland im 19. und constructed. As the personal qualities of the “creative destroyer” 20. Jahrhundert: Netzwerke — (Joseph Schumpeter) cannot be inherited, the “decline and fall” of a Nachfolge — soziales Kapi- 53 tal, ed. Susanne Hilger and once prosperous enterprise seems inevitable. Ulrich S. Soénius (Cologne, 2009), 139–58, 139–45; Kim Thomas Mann’s novel Die Buddenbrooks (1901) provides the source C. Priemel, “Heldenepos und bürgerliches Trauerspiel: Un- for the name of the German variant of this tale of rise and fall, of ternehmensgeschichte im decadence and punishment: The fi rst generation founds and builds generationellen Paradigma,” in Generation als Erzäh- up the enterprise, the second generation secures and may expand lung: Neue Perspektiven auf ein the enterprise, but the third generation loses all and fails.54 Proverbs kulturelles Deutungsmuster, ed. Björn Bohnenkamp from England (“Clogs to clogs in three generations”), Italy, China, (Göttingen, 2009), 107–28, and Japan seem to confi rm this seemingly natural law, emphasized 111–17, citation on 111. by the magic number of three. This fable is deeply moral: On the 53 Edward Gibbon’s “History of the Decline and Fall of the Ro- one hand, the sense of justice is engaged against inept heirs and man Empire” (1776–1789) attracts sympathy for the disappointed founder. On the other hand, delivered a long-lasting narrative that inspired historians many observers stress the exceptional nature of the founder and, to write hundreds of books at the same time, enjoy the triumph of mediocrity in the long run: about empires, world orders, and corporations with similar By means of his incapable heirs, Icarus fi nally gets punished for his titles (“decline and fall of . . .”, hubris. These observers and storytellers ignore the fact that there “rise and fall of . . .”). are oft en good reasons for a change in lifestyle, for organizational 54 Dirk Schumann, “Budden- change and withdrawal from operating business, and, fi nally, for a brooks Revisited: The Firm and the Enterpreneurial Fam- shift from entrepreneurship to investment. These changes, even if ily in Germany during the primarily privately motivated, can be both economically rational and 19th and Early 20th Centu- ries,” in Authority and Control socially accepted. in Modern Industry: Theoretical and Empirical Perspectives, ed. To put it bluntly: If the narration is too coherent and linear, if the Paul L. Robertson (London, 1999), 221–39. biographical subject is represented as a stereotypical “entrepreneur,”

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ﬁ t to serve as a textbook example, we have probably overlooked something. This is the last reminder of the microhistorical approach. Its methodological framework fosters our intellectual openness and discourages us from telling easy tales of biographical success and failure.

Instead of a Conclusion Biographies and group biographies (and the history of individual businesses) can and need to be studied in their own right. Neverthe- less, the biographical approach includes the methodological problem of interpreting particular cases against the background of cultural, social, and economic processes. This exceeds the elementary demand for historical contextualization, which, by the way, is not simple at all. It is necessary to look for a surplus of insight that transcends the individual life course, regardless of the scope of the individual’s agency: whether it is an immigrant entrepreneur, the miller Menocchio of Carlo Ginzburg’s “The Cheese and the Worms,” or the biographies of the great men and women who traditionally gather on the shelves of libraries and station bookshops.

It is helpful to understand biographies as microhistories of X, related to a reference value that has to be deﬁ ned by the biographer. The microhistorical approach encourages us to choose X in an experimental way, putting aside presuppositions and obvious reference points: Relating the biography of Henry Ford to the history of automatiza- tion would only lead us to reproduce what we already know about him and the Tin Lizzy.

The ﬂ exible selection of methods and sources ensures the openness of the research process, so that existing theories (like globalization, bureaucratization, and managerial revolution) and seemingly time- less categories (like “family” or “enterprise”) can be historicized in the individual case; the experimental character of microhistory may help to transcend them. The microhistorical approach can increase the historian’s sensitivity to the analytical pluses of the biographical method, since biographies can radiate to diff erent ﬁ elds of research. Complexity is added not only to a limited area of observation, to the particular biography, but also to relevant theories and conceptions of business, economy and society, which unconsciously underlie our assessment of past and present reality.

Considering the case of immigrant entrepreneurship, at the center of this volume, biographies can relate to broader ﬁ elds of migration and

FINGER | MICROHISTORIES 35 society. They may help to explain how family structures and inter- generational relations are inﬂ uenced by migration, and by a change of national, cultural, and social status; how bourgeois and middle- class culture get shaped; how experiences of individual migration and speciﬁ c patterns of group migration produce comparative advantages; how these favor or affl ict social advancement; how migration fosters cultural coherence and identities, and how it helps to disintegrate them; how religiousness and piety are aff ected; how globalization aff ects migration and vice versa; and so on. The biographies of immigrant entrepreneurs, therefore, can be “histor[ies] of the whole in all its particulars” (Hans Medick), relating people — via their economic activity — to their society of origin, migration process and new homeland. In this way, microhistory encourages us to increase the complexity of entrepreneur biographies. It leaves us the freedom and the responsibility to decide on the scales of the study and on our experimental perspectives.

Barbara W. Tuchman once admitted that when she used biographies as a skeleton in her writing, it was “less for the sake of the individual subject than as a vehicle for exhibiting an age, as in the case of Coucy in A Distant Mirror; or a country and its state of mind, as in the case of Speaker Reed and Richard Strauss in The Proud Tower; or a historic situation, as in the case of Stilwell and the American Experience in China.” She didn’t consider herself a biographer, but she occasionally used the genre and its methods as a form “to encapsulate history.” For her, biography was like a “prism of history,” evoking the idea of a modus of history that allows one to fan out the spectrum of insights contained in one single life.55 In this same way, exhibiting an age, its culture and economy, its numerous practices and identities should be at the core of a biographical microhistory of X.

Jürgen Finger is a DAAD P.R.I.M.E.-Fellow at the Centre d’histore de Sciences Po Paris and at the German Historical Institute Paris since 2015. Prior to this he was a Postdoctoral Research Fellow at Ludwig-Maximilians-Universität in Munich and at the University of Augsburg. His major publications on the 55 Barbara W. Tuchman, “Biog- educational and business history of the Third Reich include Dr. Oetker und der raphy as a Prism of History,” in Biography as High Adventure: Nationalsozialismus. Geschichte eines Familienunternehmens (2013, together with Life-writers Speak on Their Sven Keller and Andreas Wirsching); Eigensinn im Einheitsstaat. NS-Schulpolitik Art, ed. Stephen B. Oates in Württemberg, Baden und im Elsass 1933-1945 (2016). He is currently explor- (Amherst, MA, 1986), 93–103, 93 (originally published in ing “The Moral Economy of Belle Époque France,” a project that deals with the 1979). cultural embeddedness of capitalism.

36 GHI BULLETIN SUPPLEMENT 12 (2016) The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

WHY BIOGRAPHIES? ACTORS, AGENCIES, AND THE ANALYSIS OF IMMIGRANT ENTREPRENEURSHIP

Uwe Spiekermann

In 1883, when nearly 600,000 immigrants arrived in the U.S., a second-generation immigrant poet, Emma Lazarus (1849-1887), wrote a well-known hymn on Miss Liberty, “The New Colossus,” the ﬁ nal lines of which read

“Keep, ancient lands, your storied pomp!” cries she With silent lips. “Give me your tired, your poor, Your huddled masses yearning to breathe free, The wretched refuse of your teeming shore. Send these, the homeless, tempest-tossed to me, I lift my lamp beside the golden door!”1

In this sonnet, Lazarus gave voice to those who came to the U.S. for a better life and to build a new Jerusalem for themselves and for the emerging immigrant nation and economic power-house. But in this poem, Lazarus also presented an understanding of immigration as a mass phenomenon. And it is probably no coincidence that two years later German-English immigrant geographer Ernest George Ravenstein (1834-1913) formulated the ﬁ rst “laws of migration,” based on British census data.2

One law was that the “immigrant” was not an individual (Figure 1) — a view shared by the social sciences, which were then rapidly expanding; rather, “mass migration” was regarded as a constitutive element of the modern world. While, in public, national stereotypes of German immigrants became popular, German sociologists like Georg Simmel 1 Qtd. In Jonathan N. Burron and Eric Murphy Selinger, and Max Weber tried to defi ne typologies to deal with these supposed eds., Jewish American “masses.” In the U.S., the Chicago School of Sociology established a Poetry: Poems, Commentary, and Refl ections (Hanover tradition of empirical research, based predominantly on quantitative and London, 2000), 2. data, although they also introduced interviews and even biographical 2 E[rnest] G. Ravenstein, 3 case studies into migration studies. “The Laws of Migration,” Journal of the Statistical So- Up to today, narratives about immigrants are narratives about ciety of London 48 (1885): 167-235. masses. Alan Kraut’s Huddled Masses gives a detailed story of the immigrant in American society. Others focus on more specifi c groups: 3 See Ingrid Oswald, Migra- tionssoziologie (Constance, Jay D. Dolan tells the story of Irish Americans, Samuel L. Bailey 2007), esp. chs. 3 and 4.

SPIEKERMANN | WHY BIOGRAPHIES? 37 compares Italian immigration to Argen- tina and the U.S., and Donna Gabaccia also focuses on Italian immigrants in her publications.4 In the German-American case, early pioneering studies, such as those by Kathleen Conzen and Reinhard R. Doerris, used census data and local statistics to provide more detailed information on this group.5 To be sure, research has changed over the last two decades, and now addresses social and gender history, the history of ordinary people, and cultural history.6 Nonetheless, the core books of migration history still contain a lot of information on migration regimes and maps with aggregated diagrams and arrows.7 Ordinary men and women are interesting only as parts of a larger group, not as individuals.8 A good example is the nuanced research on domestic servants that combines individual cases, oft en pieced together from private let- Figure 1: Masses of immi- ters, autobiographical documents, and statistical materials to off er grants, contributing to U.S. some idea of a particular female experience of migration.9 As there labor, industry, capital, ag- riculture, and a more open- is no long-term source basis, however, these women serve only as minded society. Source: pieces of a large image of similar and interchangeable experiences.10 Wasp 7 (1881): 136. 4 Alan M. Kraut, The Huddled » Akkulturationsprozesse in der deutschen Migration. 9 See Agnes Bretting, Masses: The Immigrant in der amerikanischen Gesell- Vom Mittelalter bis heute “Deutsche Einwanderer- American Society, 1880-1921, schaft im späten 19. Jahr- (Munich, 2010); Jochen frauen im ‘Land der unbe- 2nd ed. (Wheeling, 2001); hundert (Stuttgart, 1986). Oltmer, Migration im 19. grenzten Möglichkeiten’ — Jay P. Dolan, The Irish und 20. Jahrhundert Wunsch und Wirklich- Americans: A History (New York 6 See Wolfgang Helbich, (Munich, 2013) keit. Autobiographische et al., 2008); Samuel “German Research on Quellen in der Frauen- L. Bailey, Immigrants in the German Migration to the 8 There are, of course, many forschung,” in Frauen Lands of Promise: Italians United States,” Amerika- biographical sketches, for wandern aus: Deutsche Mi- in Buenos Aires and New York studien / American Studies instance, Walter D. Kam- grantinnen im 19. und 20. City, 1870 to 1914 (Ithaca and 54 (2009): 383-404; Jan phoefner, “Chain Migra- Jahrhundert, ed. Monika London, 1999); Donna Logemann, “Transnatio- tion, Settlement Patterns, Blaschke and Christiane Gabaccia, From Sicily to nale Karrieren und trans- Integration,” in Von Heu- Harzig (Bremen, 1990), Elizabeth Street: Housing and nationale Leben: zum erleuten und Farmern: Emi- 9-28. Social Change among Italian Verhältnis von Migrant- gration from the Osnabrück Immigrants, 1880-1930 enbiographien und trans- Region to North America 10 See Margaret Lynch- (Albany, 1984). nationaler Geschichte,” in the Nineteenth Century, Brennan, The Irish BIOS 28, no. 1/2 (2015) ed. idem, Peter Marschalk, Bridget: Irish Immigrant 5 Kathleen Conzen, Immigrant [2016]: (forthcoming). and Birgit Nolte-Schus- Women in Domestic Ser- Milwaukee, 1836-1860: Ac- ter (Bramsche, 1999), vice in America, 1840- commodation and Community in 7 Dirk Hoerder, Cultures in 53-83; and the touching 1930 (Syracuse, 2009); a Frontier City (Cambridge et Contact: World Migrations biography of Catharine Silke Wehner-Franco, al., 1976); Reinhard R. Doerries, in the Second Millennium Marie Christine Höne- Deutsche Dienstmädchen Iren und Deutsche in der Neu- (Durham and London, mann in the same volume in Amerika, 1850-1914 en Welt. » 2002); idem, Geschichte (85-112). (Münster et al., 1994).

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Tales of extraordinary men and women seem to be an exception, perhaps interesting to read — but only to supplement a dominant research narrative based on aggregated empirical evidence or — more fashionable — dominant discourses. For migration history, it seems, biographies are similar to curvy women and strong men in advertisements: nice to add, but without real value for the product.

Why Biographies? This pressing question is even more relevant if we turn our perspective from migration studies to business history, a subdiscipline that should be interested in immigrant entrepreneurs as such. But “entrepreneurs” are perceived as people with (visible) hands and without faces. For most business historians, the concept of the “entrepreneur” has a function similar to that of the homo oeconomicus for economists. It is a functionalist point of reference attractive for its abstract character and its limited relation to “real” life. Complaints of fuzzy and oft en contradictory deﬁ nitions are widespread, but neo-Chandlerian, new institutional, and new economic histories off er a functionalist idea of entrepreneurship and the business world. The broader organizational turn of the post-World War II period reduced the “entrepreneur” to a mere agent of impersonal economic forces and rationalities. Although these schools clearly made important contributions to a better understanding of modern business cannot be denied, this focus led to an exclusion of methods and approaches dealing with individuals, their ambitions, convictions, and practices. Nearly three decades ago, then acting Business History Conference president Mira Wilkins described the ﬁ eld not as “economic history, not the history of an industry, not business biography, not social history; it is business history. . . .”11 At that time, her view aligned with the majority of historians who resisted “the notion that an individual life could speak to a larger historical process.”12

Against this backdrop, the question remains: Why biographies?

11 Mira Wilkins, “Business Towards a “New Entrepreneurial History:” Actors and Their History as a Discipline,” Agency as Core Problems Business and Economic History 17 (1988): 1-7, Although historiography and business history have changed funda- here 1. mentally during the last three decades, there is still a lot of skepticism 12 Alice Kessler-Harris, about biographical approaches. Yet paradoxically, there is likewise “Why Biography?” Ameri- can Historical Review 114 a growing interest in actors and their agency, and correspondingly, (2009): 625-30, here 625.

SPIEKERMANN | WHY BIOGRAPHIES? 39 13 Robert D. Cuff , “Notes for a “Entrepreneurship as individual behavior, then, once in the back- Panel on Entrepreneurship in 13 Business History,” Business ground, has moved to the foreground.” This can be easily demon- History Review 76 (2002): strated with reference to inﬂ uential publications in business history. 123-32, here 131. Three years ago, Philip Scranton and Patrick Fridenson supported 14 Philip Scranton and Patrick Bruno Latour’s catch phrase “Follow the Actors,”14 but they did not Fridenson, Reimagining Business History (Baltimore, mention biographies as a plausible method in their reimagining 2013), 201. of business history. In general, case studies have marginalized the 15 Bengt Johannisson, “Towards analysis of entrepreneurial practice, which is oft en reduced to anec- a Practice Theory of Entrepre- neuring,” Small Business Econo- dotes and leads to a separation of theory and practice, of “science” mics 36 (2011): 135-50, here and storytelling.15 138; Chris Steyaert, “Entrepre- neurship as a Conceptual At- tractor? A Review of Process It seems that business historians’ slogan is simply: Don’t mention Theories in 20 Years of Entre- biography! This is surprising because of the genre’s long tradition preneurship Studies,” Entrepre- 16 neurship & Regional Development in business history and the general public’s strong interest in it. In 19 (2007): 453-77. 1951, German-American immigrant historian Fritz Redlich counted

16 See Kenneth Wiggins Porter, no less than 450 valid “academic” business biographies in the U.S. “Trends in American Business and 200 in Germany with its stronger tradition of company histories.17 Biography,” Journal of Eco- nomic and Business History 4 Accordingly, business biographies were used as revealing sources for (1931/32): 583-610; R. Richard analyzing entrepreneurship and the myth of the self-made man in Wohl, Noel George Butlin and 18 Hugh G. J. Aitken, “Entre- Anglo-Saxon history. preneurial Biography: A Sym- posium,” Explorations in While following the actors is no longer uncommon, even current Entrepreneurial History 2 (1950): 219-32. innovative and subtle articles on the practice of entrepreneurship

17 Fritz Redlich, “The Beginnings clearly keep their distance from biographical approaches. Sociologists and Development of German Haveman, Habinek, and Goodman advocated a model of entrepre- Business History,” Bulletin of the Business Historical Society neurship “sensitive to historical context, one that ties individual 26 no. 3 (1952): 1-82, esp. actors directly to the evolving social structures they must navigate to 14-16, here 37. On the rise 19 and fall of the entrepreneurial acquire the resources they need to found organizations,” and thus biography, see Atiba Pertilla one that would reconnect agency and structure; but they did not and Uwe Spiekermann, “Liv- ing the American Dream? The mention the genre of biography. The same is true of management Challenge of Writing Biogra- analyst Dimo Dimov. Arguing that business opportunities cannot be phies of German-American Immigrant Entrepreneurs,” separated from individuals, he favored studying the “actual experi- Bulletin of the German Histori- ences of real-life entrepreneurs” — but he only talked about “the cal Institute 55 (2014): 77-90, esp. 80-84. development of qualitative comparative methodology” without being more concrete.20 Economic historian Daniel Raff wanted to “restore 18 Eyal Naveh, “The Transfor- mation of the ‘Rags to Riches’ agency, and an open-textured sense of the future to the historical un- Stories: Business Biographies derstanding of managers and entrepreneurs,” and even to put “choice, of Success in the Progressive Era and the 1920s,” American Studies International 29 (1991): 60-80; Tom Nicholas, “Clogs 19 Heather A. Haveman, 1860,” Administrative Sci- Elusiveness of Entrepre- to Clogs in Three Generations? Jacob Habinek, and Leo A. ence Quarterly 57 (2012): neurial Opportunities,” Explaining Entrepreneurial Goodman, “How Entre- 585-624, here 586. Entrepreneurship Theory & Performance in Britain since preneurship Evolves: The Practice 35 (2011): 1850,” Journal of Economic Founders of New Maga- 20 Dimo Dimov, “Grappling 57-81, here 62 History 59 (1999): 688-713. zines in America, 1741- with the Unbearable and 73.

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and above all, actors and their actions, at the center of analysis,”21 but again, he did not mention biography. More examples could be given.22 It seems that the “highly subjective” nature of entrepreneurial prac- 23 tice still generates extreme concerns within the profession. Phrases 23 Howard E. Aldrich and like “what matters to man are his illusions” are perceived as superﬁ - C. Marlene Fiol, “Fools Rush In? The Institu- cial, although entrepreneurship is based on the interaction between tional Context of Indus- individual (and group) perspectives and resources and the historical try Creation,” Academy of Management Review 19 setting. Skepticism about biographical approaches is also triggered (1994): 645-70, here 651. by the socialization within the profession, wherein the company is by 24 David Jacobs, “Critical Bi- far regarded as the dominant unit of analysis, disparate intellectual ography and Management Education,” Academy of approaches and traditions are homogenized, and historical context is Management Learning & neglected.24 But anyone who wants to reach the ambitious goals of a Education 6 (2007): 104- 108, here 104. modern and integrative business history — a mantra in business and economic history schools aft er their helplessness during the world 25 See Hedwig Richter and Ralf Richter, ﬁ nancial crisis 2008/2009 — should try to broaden its methodologi- “Der Opfer-Plot. cal arsenal and include biographical approaches. The same is true of Probleme und neue Felder der deutschen 25 migration studies — at least in Germany. Arbeitsmigrationsfor- schung,” Vierteljahrsheft e für Zeitgeschichte 57 (2009): Biographies aft er the “Biographical Turn” 61-97; Hedwig Richter, “Die Realität kann sie Skepticism about biographies is oft en based on an old-fashioned nicht stoppen. Mythen der Migrationsforschung,” idea of biography as “that branch of history which had been culti- Frankfurter Allgemeine vated least successfully.”26 There is a general idea of biography be- Zeitung, 1 June 2016; Albert Scherr, “Mythen ing a less scholarly genre — a perception aggravated by the human über die Migrationsfor- touch of biographies and the interest of social creatures in the life schung,” Frankfurter Allgemeine Zeitung, and experiences of others; biographies are regarded as popular but 16 June 2016. 27 not really academic. However, biographical research has moved 26 William Roscoe Thayer, away from treating history “as a sequential accumulation of accom- “Biography,” North Ame- rican Review 180, no. 579 plishments and attributions of priority, associated with individual (1905), 261-78, here 261. names.”28 Such harsh statements were based on a heroic model 27 Annette Gordon-Reed, of biography, established in the late nineteenth century, when the “Writing Early American British Dictionary of National Biography or the German Allgemeine Lives as Biography,” William and Mary Quarterly Deutsche Biographie not only celebrated the rise of the educated 71 (2014): 491-516, esp. and entrepreneurial bourgeoisie but also linked biographies to 491. 29 the nation. This gave way to structural explanations, pushed by 28 Mary Terrall, “Biography the experiences of the world wars, global economic crisis, the rise as Cultural History of Sci- ence,” Isis 97 (2006): 306- 13, here 307. 21 Daniel M. G. Raff , “How positions to action, of an “The Presence of Entre- to Do Things with Time,” organization, and to some preneurial Opportunity,” 29 Lucy Riall, “The Shallow Enterprise and Society extent, of the individuals Business History 55 End of History? The Sub- 14 (2013): 435-66, here whose actions comprise (2013): 9-28, provides stance and Future of Po- 446. However, he favors it” (ibid., 459). a fascinating analysis litical Biography,” Journal “a reconstruction of the of entrepreneurial ac- of Interdisciplinary History lived experience and un- 22 For instance, Andrew tivity and the historical 40 (2010): 375-97, esp. derstandings, and predis- Popp and Robin Holt, context. 377-80.

SPIEKERMANN | WHY BIOGRAPHIES? 41 of managers, and Keynesianism. In history and economics, some continued to emphasize the relevance of individual organizations 30 Peter Kriesler, “Writing Biogra- and actors — for instance, economist William Jaff é, who analyzed phies of Economists,” History of Economic Ideas 3, no. 2 economics as an individual artifi cial construction with a social and (1995): 73-88; Donald A. historical dimension.30 But mainstream neoliberal economists, like Walker, “William Jaff é, His- torian of Economic Thought, Chicago-based Nobel Memorial Prize winner George Stigler, excluded 1898-1980,” American Econo- such approaches from science: “When we are told that we must study mic Review 71 (1980): 1012- 19. For Germany, see Wilhelm a man’s life to understand what he really meant, we are being invited Treue, “Die Bedeutung der 31 Unternehmerbiographie für to abandon science.” In the academic knowledge markets, a biogra- die wirtschaft sgeschichtliche phy served as a career ender — and, consequently, academics avoided Forschung,” Tradition 10 (1965): 254-65. this genre, turning instead to abstract structural explanations, and criticized subjectivity. 31 George J. Stigler, “The Scientifi c Uses of Scientifi c Biography, with Special Reference to J. S. But things have changed: beginning in the early 1990s, postmod- Mill [1976],” in The Economist ernism and the cultural turn led to a “new biography” or even a as Preacher and Other Essays (Chicago, 1982), 86-97, here “biographical turn” wherein historical inquiry pursued actors, their 91. For Germany, see Martin identities, meanings, and discourses.32 Business and migration his- Kohli, “Wie es zur ‘biogra- phischen Methode’ kam und tory are latecomers to these theoretical and methodological debates. was daraus geworden ist. Ein Although biography links rather diff erent theoretical approaches and Kapitel aus der Geschichte der Sozialforschung,” Zeitschrift für has developed a variety of diff erent forms, no longer being limited Soziologie 10 (1981): 273-93. to one prominent person, biographical researchers do constantly 33 32 An overview of the rise of have to defend themselves against basic epistemological criticism. “new biography” is given by Biographical research eventually benefi ted from theoretical chal- Hans Erich Bödecker, “Biog- raphie. Annäherungen an den lenges from sociological post-structuralism, micro- and labor his- gegenwärtigen Forschungs- und Diskussionsstand,” in tory. Gender and race became important research categories and Biographie schreiben, ed. ibid. established a fairly reasonable idea of the white spots of traditional (Göttingen, 2003), 9-63; Simone 34 Lässig, “Die historische Bi- biographies. In particular, entanglements between individual lives ographie auf neuen Wegen?” and general history have been extensively discussed.35 Context be- Geschichte in Wissenschaft und Unterricht 60 (2009): 540-53. came an undisputed fundamental element of general history: “Biog- raphy is history, depends on history, and strengthens and enriches 33 Prue Chamberlayne, Joanna 36 Bornat, and Tom Wengraf, history. In turn, all history is biography.” From the perspective of “Introduction: The Biographical “new biography,” mainstream historiography and also business and Turn,” in The Turn to Biogra- phical Methods in Social Sci- economic history were criticized for failing to realize that the hands ence: Comparative Issues and of individuals are everywhere, either visible or buried in general Examples, ed. ibid. (London, 2000), 1-30; Pierre Bourdieu, assumptions of structures and processes. Today, prosopographical “L’Illusion Biographique,” research deals with “minorities” and less prominent social and ethnic Actes de la Recherche en Sciences Sociales 62 (1986): 69-71; Anthony Giddens, Modernity » [1930],” in Das Ornament 35 See Atiba Pertilla 36 Robert I. Rotberg, “Biog- and Self-Identity: Self and Society der Masse (Frankfurt/M, and Uwe Spiekermann, raphy and Historiogra- in the Late Modern Age (Cam- 1977), 75-80. eds., “The Challenge phy: Mutual Evidentiary bridge, 1991), 76, and passim. of Biography,” and Interdisciplinary The core arguments were 34 Lois W. Banner, “Biography Bulletin of the Considerations,” Journal already made by Siegfried as History,” American His- German Historical of Interdisciplinary His- Kracauer, “Die Biographie als torical Review 114 (2009): Institute 55 (2014): tory 40 (2010): 305-24, neubürgerliche Kunstform » 579-86, here 580-82. 39-101. here 305.

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groups.37 Mentalities and meanings, practices and performances, emotions and feelings are examined with the help of biographical approaches. The genre of biography is no longer a backward and conservative method but an experimental ﬁ eld for the historiography of the twenty-ﬁ rst century.38 It allows for a theoretically and methodologically advanced study of history without imposing a meta-narrative upon it.39

The “biographical turn” marks a refl ex to changes in the historical, sociological, and economic professions, the rise of refl exive modernization related to neoliberal questions of constructing one’s own life according to market needs, and an attempt to bridge the analysis of macro- and micro-levels, so prominent in economics and sociology; but individual lives and narratives always bring the social context to light. For the living, biography “appears both as long-term plans 39 Ian Kershaw, “Biography and the Historian: Opportu- and as a fi eld of learning where the life project and identity have to nities and Constraints,” in be reshaped fl exibly on the basis of transitions in the life course.”40 Biography between Structure and Agency, ed. Berghahn This perspective provides an important heuristic lens for the his- and Lässig (2008), 27-39, torical analysis of actors and their agency. Although the growing here 31. importance of the genre also emerges from the “age of fracture” and 40 Ari Antikainen and Katja a neoliberal refl exive modernity, it is the interaction between the Komonen, “Biography, Life Course, and the So- public and the private, the general and the individual, that makes a ciology of Education,” in thorough description of a person’s life possible with empirically solid International Handbook on the Sociology of Edu- results that shed light far beyond the individual.41 Modern biogra- cation, ed. Carlos Alberto Torres and Ari Antikainen phies are an indispensable tool of historiography, but they off er no (Lanham, 2003), 143-59, silver bullet for signifi cantly better results — compared to the variety here 152. 42 of other historiographic approaches. In addition, “new biography” 41 Susan E. Chase, “Nar- is an interdisciplinary eff ort, which questions disciplinary and sub- rative Inquiry: Multiple 43 Lenses, Approaches, disciplinary approaches. This complicates problems of reception but Voices,” in The Sage Hand- allows for traditional methods of historiography — including busi- book of Qualitative Research, 3rd ed., ed. Norman K. ness and migration history — to be rethought and improved upon. Denzin and Yvonna S. Lincoln (Thousand Oaks, Biographies are surely a challenge for (business and migration) his- 2005), 651-80. torians because of the subjectivity they entail, but this subjectivity 42 Volker Depkat, “Ein pertains not only to the genre. It also has a bearing on the social role schwieriges Genre: Zum Ort der Biographik in der of historians and other scholars doing historical research. If modern Arbeitergeschichtsschrei- bung,” Mitteilungsblatt des 37 For an overview, see Historiography, ed. Volker R. Mitteilungsblatt des In- Instituts für soziale Simone Lässig, “Intro- Berghahn and Simone stituts für soziale Bewe- Bewegungen 45 (2011): duction: Biography in Lässig (New York and gungen 45 (2011): 5-20; 21-35. Modern History — Oxford, 2008), 1-26. Mark Hearn and Harry Modern Historiography Knowles, “Representa- 43 Shirley A. Leckie, “Why in Biography,” in Biogra- 38 Jürgen Mittag, “Biograf- tive Lives? Biography Biographies Matter in the phy between Structure and ische Forschung und and Labour History,” La- Classroom,” OAH Maga- Agency: Central European Arbeiterbewegung: Ein- bour History 100 (2011): zine of History 20 (2006): Lives in International leitende Anmerkungen,” 127-44. 7-10, esp. 7.

SPIEKERMANN | WHY BIOGRAPHIES? 43 societies are knowledge societies, and if scholars, as professionals, produce knowledge fundamental to politics, economics, and culture in these societies, then they have to face the same questions normally reserved for the applied social sciences and natural sciences. Bio- graphical research helps us to refl ect — individually and collectively as a profession — on how we organize knowledge and why. Doing so will force us to think more honestly and self-critically about the uses and functions of history and historical knowledge in modern societies. The paradox is that we not only attribute agency to others, but as experts, we constantly fi ght against the subjective knowledge of the majority. Our work — individually and collectively as a profession — is no longer about reconstructing the past as it actually was. Instead, it is about refl ecting on what should be reconstructed and challenged — and why.

Biographies in Business (and Migration) History Taking this fundamental change of the genre of biographies into consideration, business (and migration) historians should overcome their skepticism of such new perspectives and focus on the opportunities that emerge from this actor- and agency-centered perspective. Broadly, we can distinguish two general approaches toward biography within business history today.

The ﬁ rst is to use the biographical approach as a tool to improve entrepreneurial studies inside the framework of established theories, especially institutionalism. Economic historian Werner Abelshauser gave a good example of this in his voluminous biography of German politician and entrepreneur Hans Matthöfer (1925-2009).44 This book resulted from the author’s dissatisfaction with modern functional and institutionalist approaches in economic history. His own research of the German production regime and leading multinational ﬁ rms prompted Abelshauser’s interest in the causes of institutions emerging and changing. He argued that the mindsets and the behaviors of strategic actors in politics and business were crucial to any explanation of institutional change. An analysis of their thinking and practices could off er a way to analyze, understand, and explain innovations. Abelshauser developed a model of biographical practice

44 Werner Abelshauser, Nach based on historical institutions and external challenges and checks. dem Wirtschaft swunder. Der Included are the socialization of the individual, unquestioned binding Gewerkschaft er, Politiker und Unternehmer Hans Matthöfer rules, and the inﬂ uences of education, on the one hand, and political (Bonn, 2009). I refer here to structures, friends and reference persons, and emotional crises, on the theoretical considerations in chapter 1. the other. Abelshauser argued that the private, business, and political

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decision-making of strategic actors is based on their institutional settings and external constellations. It is guided by their learned ways of thinking and acting, and on the choice between material and emotional benefi ts and private advantages, in general. Abelshauser transferred this fairly simple model of biographical practice into a questionnaire, as well as into the structure of this 800-page biography. He justifi ed the use of such “soft ” research parameters with his interest in the “black box” of individual decision-making and prac- 45 For a similar approach tices. Biographies are useful tools for gaining a better understanding from the perspective of company studies, see of structures and events, and they enable improved models even for Friederike Welter, “Con- collective phenomena.45 textualizing Entrepre- neurship — Conceptual Challenges and Ways Business historians Dan Wadhwani and Christina Lubinski, both in- Forward,” Entrepreneur- ship Theory & Practice 35 volved in the GHI’s Immigrant Entrepreneurship project, suggested a (2011): 165-84, esp. 176. second approach. They defi ne a “new entrepreneurial history” as “the 46 R. Daniel Wadhwani and study of the processes through which actors, individually and col- Christina Lubinski, “To- lectively, make sense of and pursue the development of future goods, ward the ‘New Entrepre- neurial History,’” Working services, and markets, thereby transforming markets, industries, Paper for Paper Develop- and capitalism from within.”46 Such a history is open to including ment Workshop ‘Historical Approaches to Entrepre- biographical approaches, although they try to distinguish between neurship Theory & entrepreneurship and entrepreneurs. From the perspective of “new Research,’ June 24, 2015, BHC/EBHA Miami, FL biography,” this is neither possible nor necessary. Even if their core (Ms.), 10. interest is on “the processes by which futures are made present,”47 it 47 Wadhwani and Lubinski, is individual actors who engage in these processes, oft en with rather “Toward the ‘New Entre- individual agency, always combining individual ideas and institu- preneurial History,’” 16. tional settings. The charm of the new entrepreneurial history lies in 48 See Joyce Koe Hwee its combination of a clear-cut focus with methodological and theo- Nga and Gomathi Shamuganathan, “The retical openness. This allows business history and entrepreneurial Infl uence of Personality Traits and Demographic studies to keep up with the theoretical and methodological debates Factor on Social Entrepre- in the humanities and social sciences without losing the profession’s neurship Start Up Inten- 48 tions,” Journal of Business focus. Examining an actor’s sense-making, temporality, and deal- Ethics 95 (2010): 259-82 ing with uncertainty, the “new entrepreneurial history” is already (quantitative); Caroline B. Brettell and Kristoff er E. much more advanced than the business history of the early 1950s, Alstatt, “The Agency of wherein the entrepreneur was understood as “a participating member Immigrant Entrepreneurs: Biographies of the Self- of a culture in which, and by which, he executes his functions and Employed in Ethnic and achieves his ends,” which also tried “to integrate the businessman’s Occupational Niches of the Urban Labor system of action with other relevant (and oft en non-economic) sys- Market,” Journal of tems of action.”49 Anthropological Research 63 (2007): 383-97 (qualitative). The rise and discussion of such new approaches for improving business and migration history refl ect important benefi ts of new 49 Wohl et al., “Entrepre- neurial Biography,” 220 biographical approaches: and 221.

SPIEKERMANN | WHY BIOGRAPHIES? 45 • They off er a test fi eld for more general theories and allow for the atmosphere of a particular past to be integrated into abstract ideas on historical periods. The perception, thinking, and practice of entrepreneurial actors are also important if we ask what those experiences can tell us about the past.50 These new “facts” will allow us to identify problems and confl icts not included in general theories. • The biographical perspective includes a broad variety of research tools, including oral history and prosopography, as well as individual and family histories. • Such a perspective will contribute to improving current functionalist and institutional theories by giving information on how and why institutions emerge, are established, and change. The perspective of the individual actor not only demonstrates how innovations emerge but also how they are implemented into institutions, fi rms, etc. • Biographical approaches can question the appropriateness of any theory or theoretical approach by analyzing contradictory practices and anticipatory behavior. This makes a general critique of the subsequent mainstreaming of historical and individual happenings possible. • They can demonstrate that life is not really predictable, that “normal” careers are often not intentional, that individual and general uncertainty and political fractures are formative and transformative powers, and that biographical meaning and intentional acting are retrospective endeavors.51 • Biographical approaches fi nally allow history to be reconstructed going forward, from the goals and practice of actors, rather than read backwards.52

Surely, more points could be added, but it is more important to remember that biographical approaches are also associated with some structural problems that must be balanced out with reference to more general theories and case studies.

A crucial danger is the overestimation of economic actors and the relative neglect of changes in processes. This includes potentially

50 Kessler-Harris, ”Why Biogra- neglecting the power of institutions and collective phenomenon. phy,” 626. Tracing the narrative — the plot of an individual life — can limit one’s 51 Lässig, “Die historische Biog- analytical distance, which is necessary for any academic endeavor. raphie,” 545. Another problem even for more advanced biographers is interpret- 52 Dimov, “Grappling,” 56. ing through the lens of a “hero” or from the perspective of only one

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side/person. This includes a strong emphasis on intentional acting overshadowed by the known outcomes of the individual’s life. The biographer’s personal interests and desires also pose a threat, because “all biography is, in part, autobiographical.”53 Finally, readers and writers should be aware that biographies cannot really off er any generalizations. It is possible to deﬁ ne some general patterns and typical ways of thinking and acting, but not more.

Empirical Evidence: The GHI’s Immigrant Entrepreneurship Project The opportunities and diffi culties of such a biographic endeavor can be demonstrated by the biographical research project “Immigrant Entrepreneurship: German-American Business Biographies, 1720 to the Present,” headed by Hartmut Berghoff and Uwe Spiekermann. Launched in 2010, more than 150 scholars explored the entrepreneurial, economic, social, and cultural capacity of immigrants by investigating the German-American example in the U.S.54 These biographies of businesspeople are intended not only to off er a new integrative perspective on the lives, careers, and business ventures of signiﬁ cant immigrants but also to answer core questions of American, business, and migration history from a diff erent and more subtle point of view. The project’s main presupposition was that biographies would make it possible to question notions of American exceptionalism in order to situate U.S. history in a transnational framework and understand 53 Shirley Leckie, “Biography the formation and ongoing changes of an immigrant nation over a Matters: Why Historians Need Well-Craft ed Biogra- period of nearly three-hundred years. In addition to provincializing phies More than Ever,” in Lloyd E. Ambrosius, ed., the United States, the project also aims to provincialize Germany and Writing Biography: Histori- the German states: The transnational biographies of migrants over ans & Their Craft (Lincoln and London, 2004), three centuries allow for the reconceptualization of the meaning and 1-26, here 2. relevance of the heterogeneous Western nation-states and for their 54 For details, see http:// well-known self-referential narratives to be called into question. Fo- www.immigrantentrepre- cusing on German-American businesspeople means focusing on an neurship.org. immigrant nation — the U.S. — and an emigrant nation that turned 55 Proof of this is the pro- into an immigrant one — Germany. grammatic article by Hartmut Berghoff and Uwe Spiekermann, “Immi- The immigrant entrepreneurship project aimed to explore hundreds grant Entrepreneurship: of biographies; the sheer amount of empirical material aimed to The German-American Business Biography, 1720 demonstrate that biographies could be useful for answering general to the Present: A Research questions in addition to analyzing individual lives.55 The biographi- Project,” Bulletin of the German Historical Institute cal details should enable scholars and the general public to more 47 (2010): 69-82, which clearly understand and to arrange the general patterns of American does not refer to the genre of biography and its history as the history of immigration, acculturation, and mobility. The methodology.

SPIEKERMANN | WHY BIOGRAPHIES? 47 signiﬁ cance and function of ethnic, religious, and family network, of gender roles, of business strategies and comparative advantages/ disadvantages of strangers — these are relevant questions far beyond the traditional perspective of individual biographies.

The biographies of the immigrant entrepreneurship project are freely available to the public via the project’s website http://www. immigrantentrepreneurship.org. As of June 13, 2016, 184 biographies (approximately 20 pages each) had been posted. Moreover, many additional manuscripts are in the editorial process, and eventually more than 210 individual contributions will give a detailed and nuanced idea of German-American immigrant entrepreneurship during the last three centuries. The website is comprised of both texts and currently more than 2,000 images and nearly 1,000 documents to provide a fresh idea of the immigrant experience. The research project covers not only the well-documented period of individual capitalism in the late nineteenth and early twentieth century: there are currently approximately thirty biographies each for the period before 1840 and aft er World War II to give vivid insight into the severe changes in immigration, entrepreneurship, and the economic, social, political, and cultural framework of the pre- and postindustrial worlds.

This is not the place to discuss already available results in detail: However, it becomes clear that crucial entrepreneurial decisions of regional and even national signiﬁ cance cannot be explained without detailed analysis of decision-makers’ biographies and their agency. Two examples from my own research underline this:

When Claus Spreckels (1828-1908), the dominant sugar producer in the American West in the late nineteenth century, was asked in 1887 by representatives of the newly established “sugar trust,” the Ameri- can Sugar Refi ning Company, to become a partner of the planned monopoly, he simply refused.56 From a rational entrepreneurial point of view, this response made no sense because the fi nancial results of the new combination would have been more than promising. In addition, fi ghting a conglomerate with the second-largest capitalization in the U.S. was not very promising even for the probably richest German-American immigrant entrepreneur of this time. But Spreckels, a patriarch and self-made man, wanted to remain his own master. The confl ict stirred up when shortly aft erwards the sugar trust purchased the last remaining non-Spreckels refi nery in San Francisco 56 Uwe Spiekermann, “Claus and slashed sugar prices. This was the start of a fi erce and immensely Spreckels: Robber Baron and Sugar King,” in IE. costly “sugar war.” Instead of surrendering, Spreckels attacked his

48 GHI BULLETIN SUPPLEMENT 12 (2016) The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

Eastern competitor with ten times as much capitalization: “This trust has trampled on my toes and I won‘t stand it.”57 The German-American immigrant refused to compromise with “a Wall-street crowd,” went to the East, invested approximately four million US-dollars to establish the nation’s largest refi nery in Philadelphia, and undercut sugar prices. In the early 1890s Spreckels’s sugar empire was close to collapsing, but fi nally the Eastern investors — not aware of these problems — off ered an honorable agreement: Spreckels sustained his independence in the American West, sugar prices were coordinated, and further investments into the California beet sugar industry were supported by the sugar trust. Spreckels would have made a more profi table deal if he had accepted the original off er in 1887. But aft er fi rst cracks in his dominant position in the Hawaiian sugar business appeared and his four sons grew increasingly independent, fi ghting his competitors even at the cost of immense fi nancial losses made sense for Claus Spreckels. The skillful entrepreneur, who developed one of the fi rst vertically integrated businesses in U.S. history, was not a rational, calmly calculating and visionary actor but an emotional gambler who tried and made the “bluff ” of his life.

Charles F. Pfi ster (1859-1927), from the early 1890s Milwaukee’s leading investor and co-owner of the largest independent U.S. tan- ning fi rm Vogel & Pfi ster, was another entrepreneur who did not act in accordance with rational choice.58 Aft er the death of his adoptive father Guido Pfi ster, the rich heir made costly investments to fulfi ll his dreams — dreams the shrewd, elder German-American immigrant entrepreneur had deemed too expensive. His adoptive son, who had not previously functioned as an executive, invested nearly 15-20 percent of his estate to build the prestigious Hotel Pfi ster in Milwaukee. Opened in 1893, at a time of severe fi nancial and commercial depression, the investment led to heavy losses that took years to turn around. Pfi ster was also eager to establish himself as a local Republican political boss, that is, as a decisive power player in the background. Supporting leading politicians helped get a very profi table regional streetcar system established, but it implied a break with his father’s sound business principles. When the general public and political opponents called for graft investigations and 57 “The Sugar Trust’s Foe,” political consequences, Charles Pfi ster was even willing to purchase New York Times, 18 May Wisconsin’s leading newspaper, the Milwaukee Sentinel, for much 1888. more than $400,000. As a fi ghting organ of Pfi ster’s stalwart con- 58 Uwe Spiekermann, “Busi- victions, it constantly generated losses until it was sold to William ness and Politics: The Contested Career of Randolph Hearst in 1924. In general, Charles F. Pfi ster made immense Charles F. Pfi ster” in IE.

SPIEKERMANN | WHY BIOGRAPHIES? 49 profi ts — far higher than those of his father. But while Guido Pfi ster was a shrewd businessman who thought twice before making any investments, his adoptive son used his money for prestigious and unprofi table projects and — probably — illicit business. Graft accusations and his interest in achieving a highly regarded public position also prompted him to make immense donations to charity (up to $90,000 per year).

Business decisions like those of Claus Spreckels and Charles F. Pfi ster can’t be explained without taking a closer look at their private lives, interests, agency and even emotions. The Immigrant Entrepre- Figure 2: Claus Spreckels, neurship Project includes many similar biographies with moments c. 1890. Source: The Bay of “irrational” decision-making, which nonetheless made sense to of San Francisco: The Me- tropolis of the Pacifi c Coast the individual entrepreneurs in their particular historical situation. and Its Suburban Cities. Although most of the biographies are still quite traditional and do A History, vol. 1 (Chicago: Lewis, 1892), 348. not set new standards, many examples underline the fact that even shorter biographical studies can enrich our empirical knowledge of entrepreneurial activities. They can also aid our understanding of the fundamental role non-economic motives played in (successful!) risk-taking and question easy answers based on general theories of entrepreneurship. The same applies to the broader fi eld of migration studies.

Conclusion Biographical approaches, migration studies, and traditional case or company studies are allies, not rivals. Biographical research allows migration and business history to deal with new historical ﬁ elds and to broaden its own research agenda. Although one should fundamentally be skeptical of the human touch of any biography, such approaches generate a broader appeal among readers. Biographical approaches can breathe life into dry functionalist approaches and put faces on tables: They can help to revitalize migration and business history as an integrative discipline relevant not only to business elites but also, and perhaps foremost, to the general public. Biographies 59 Kessler-Harris, “Why Biogra- phy,” 625; Michael Holroyd, generate additional and diff erent “facts” and “empirical” evidence. “What Justiﬁ es Biography?” The profession needs diff erent language and interpretive skills to The Threepenny Review 89 (2002): 16-17. weave both new and old “facts” into persuasive arguments.59 This

50 GHI BULLETIN SUPPLEMENT 12 (2016) The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

implies that biographies should be more than simply samples to illuminate trends or case studies to exemplify more general topics. Biography is a challenging genre because its perspective an actors and agency challenges well-accepted ideas of business, migration, and history. It gives researchers not the one best approach but an experimental toolbox for analyzing the process of searching for information, evaluating the ﬁ ndings, making decisions and transforming ideas into goods.60 Biographies off er diff erent forms of (hi)story-telling, replacing the typical omniscient retrospective with a detailed analysis of forward-looking acts in moments of insecurity.

Although the systematic use of reconstructions of the lives and Figure 3: Charles F. Pﬁ ster, agencies of entrepreneurs, retrieved and reconstructed from a broad c. 1900. Source: Chicago Daily Tribune, 5 August range of sources, is plagued with problems in the habits of research- 1905, 2. ers and the intellectual perspectives they apply and generalization also remains a serious issue, biographies can contribute to a better understanding of (immigrant) entrepreneurship itself. Actors and their agency were crucial to the rise and the transformation of markets, industries, and capitalism — and they are crucial, as well, to an adequate analysis of these processes.

Uwe Spiekermann is a Privatdozent at the Georg-August-University of Göttingen. He was a deputy director of the German Historical Institute Washington DC from 2008-2015, and a general editor of the Immigrant Entrepreneurship Project. He has held teaching and research positions in Bremen, London, Exeter, Münster, and Vienna, and he also served as the managing director of a Heidelberg-based foundation for healthy nutrition. His work focuses on the economic and social 60 See Ronald Savitt, “On history of Germany and the United States in the nineteenth and twentieth Biography in Marketing,” centuries, the history of consumption, marketing, nutrition, and the history of Journal of Historical Research in Marketing 3 science and knowledge. Spiekermann is currently writing a family biography of (2011): 486-506, esp. the Spreckels family, better known as the “Sugar Kings” of the American West. 489.

SPIEKERMANN | WHY BIOGRAPHIES? 51

The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

THE IMMIGRANT ENTREPRENEURSHIP PROJECT: RATIONALE, DESIGN, AND OUTCOME

Hartmut Berghoff

The project “Immigrant Entrepreneurship: German-American Busi- ness Biographies, 1720 to the Present” was offi cially ﬁ nished in the summer of 2016. It had entered its planning stage in the fall of 2008 and its working phase began in 2010, aft er a grant from the German Economics Ministry was approved. This project met a strong demand for biographical studies that adhere to scholarly standards. As of May 2016, over 200,000 unique users had visited the site since it went online in February 2012. At the date of publication, we had 2,400 visitors per week.

Rationale and Design The project’s rationale was to transform the abstract phenomenon of immigrant entrepreneurship into concrete biographies. The aim was to give immigrant entrepreneurs a face and to analyze their private biographies and business ventures together, as both are mutually interdependent. The project looked at individual biographies and business histories rather than at statistical aggregates. It pursued a qualitative not a quantitative approach.1

Why did we embark on such a vast and time-consuming project? Mostly, we wished to ﬁ ll this academic void. Immigrant entrepreneurship in general and the role of German immigrants within the American business community are extremely important topics but have been neglected, almost ignored, for many years. This project addresses two central themes in the history of the United States: immigration and entrepreneurship. The topics are closely interre- lated, since the U.S. developed a strong culture of entrepreneurship as it became the quintessential receiving country of migrants in the nineteenth century. While entrepreneurship still is a key component of American culture and its value is essentially undisputed, the way immigration is viewed has changed considerably. In the course of the 1 Hartmut Berghoff and Uwe twentieth century, immigration policies have become more restric- Spiekermann, “Immigrant tive. However, the nexus between immigration and economic growth Entrepreneurship: The German-American Busi- created by immigrant businesspeople is still strong. ness Biography, 1720 to the Present — a GHI Proj- Immigration is a rich source of entrepreneurship. Empirical stud- ect,” Bulletin of the German Historical Institute 47, ies conﬁ rm that self-employment off ers is a strong pull factor for no. 2 (2010): 69-82.

BERGHOFF | IE PROJECT 53 immigrants, as other avenues of social integration and advancement are oft en barred or more diffi cult to access. The experience of navi- gating between cultures can be uncomfortable and very challenging

2 Charles Hirschman, “Immi- but, at the same time, it can be “an asset that sparks creativity and gration and the American inspiration” and creates “new possibilities for entrepreneurship.”2 Century,” Demography 42, no. 4 (2005): 595-620, here In the U.S., immigrants have always been overrepresented among 612-13. the self-employed.3 Although small and oft en unstable businesses

3 Roger Waldinger, “Immigrant predominate in immigrant communities, petty trades can act as Enterprise: A Critique and springboards to the higher echelons of the business world. In 2005, Reformulation,” Theory and Society 15, no. 1 (1986): companies founded by immigrants between 1995 and 2005 generated 249-85, here 249-50. $52 billion in revenue and had created 450,000 jobs.4 4 Vivek Wadhwa, “Foreign-Born Entrepreneurs: An Under- Immigrant businesspeople commonly bring a diverse array of skills estimated American Resource,” Kaufman Thoughtbook (2009): and a prodigious work ethic with them. They can, in other words, 177-81, here 177. be seen as imported human capital that is crucial for innovation and

5 Jan Rath and Robert economic development. Immigrants themselves can benefi t from Kloosterman, “Outsiders’ the specifi cs of ethnic networks like trust-based cooperation and Business: A Critical Review of Research on Immigrant mutual assistance and credit, the internal cohesion of minorities Entrepreneurship,” Internatio- and their families, and lasting relations to their home country that nal Migration Review 34, no. 3 (2000): 657-81. See also might involve particular commercial opportunities such as trade or Andrew Godley, “Migration of the transfer of knowledge and other resources.5 Entrepreneurs,” in The Oxford Handbook of Entrepreneurship, ed. Mark Casson (Oxford, For sociologist Georg Simmel the “stranger” was a “freer man.” “He 2006), 601-10; Hartmut examines the conditions with less prejudice . . . His actions are not Berghoff and Andreas Fahrmeir, “Unternehmer und Migration. confi ned by custom, piety, or precedent.” He benefi ts from the “union Einleitung,” Zeitschrift für of closeness and remoteness.” He has the “freedom . . . to experience Unternehmensgeschichte 58, no. 2 (2013): 141-48; and and treat even his close relationships as though from a birds-eye the other essays in this 6 issue of Zeitschrift für view.” “Strangers,” Mark Granovetter demonstrated decades later, Unternehmensgeschichte. can design social relationships in a way that enables them to reap the

6 Georg Simmel, “The Stranger,” beneﬁ ts of an economically more favorable conﬁ guration of closeness in idem, On Individuality and and distance. Granovetter speaks of the concurrence of “coupling” Social Forms, ed. Donald Levine (Chicago, 1971) and “decoupling.” In other words, they are not total outsiders but are (German Original 1908), still diff erent enough to be “less entangled in local obligations” and 143-50, here 143 and 146; 7 and Almut Loycke, Der Gast, less restricted by them. der bleibt. Dimensionen von Georg Simmels Analyse des Immigration today is oft en seen as a burden or even danger to the Fremdseins (Frankfurt a.M./ New York, 1992). receiving country and a threat to its social stability. Our in-depth historical analysis of immigrant entrepreneurship and its interrelation 7 Mark Granovetter, “The Eco- nomic Sociology of Firms and with elite formation has corrected this gloomy picture and hopefully Entrepreneurs,” in The Econo- will raise awareness that immigration can also be a source of strength mic Sociology of Immigration. Essays on Networks, Ethnicity, that helps create additional wealth not only by bringing cheap labor to and Entrepreneurship, ed. the lower end of the market but by providing fresh talent for strategic Alejandro Portes (New York, 1995), 128-65, here 147. business leadership.

54 GHI BULLETIN SUPPLEMENT 12 (2016) The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

Immigrant entrepreneurship was one of the decisive factors in the U.S. rising to become an economic superpower in the late nineteenth century. The country’s relative openness and freedom attracted talent from around the world and encouraged minorities fl eeing from discrimination elsewhere to try their luck. The lack of petrifi ed social divisions, caste-like systems and feudal structures, as well as the high regard for businesspeople and a superior opportunity structure, must be added to the comparative advantages of the U.S. These sparked a self-reinforcing and benefi cial circle of wealth creation and immigration: “No other country refreshes itself in quite the same way by continuous waves of immigration.”8

Entrepreneurship is a sine qua non of economic development. Economists have long neglected the study of entrepreneurship “exactly because of the bias to the assumption that profi table activities 9 automatically take place.” The market mechanism prompts rational 8 The Economist (no date economic actors to react to opportunities. Economics has trivialized given), quoted in Thomas K. McCraw, ed., Creating entrepreneurship, although it is obvious that there is no automatic Modern Capitalism: How supply of entrepreneurs and that it takes more than opportunity Entrepreneurs, Companies, and Countries Triumphed structures to motivate people to set up businesses. Since the 1980s in Three Industrial entrepreneurship has attracted growing interest in management Revolutions (Cambridge, MA, 1997), 348. studies and economic sociology.10 9 Mark Granovetter, “Busi- Although this project was designed to focus on one specifi c national ness Groups and Social Organization,” in group, from the very start it also had a wider perspective and ben- Handbook of Economic efi ted enormously from research done on other ethnic groups. The Sociology, ed. Neil J. Smelser and Richard wealth of literature on recent Asian and Latin American immigrant Swedberg (Princeton, entrepreneurship in the U.S. also proved useful.11 Although these 1994), 453-75, here 453. studies focused on recent decades and the non-European ethnic 10 Geoff rey Jones and R. Daniel Wadhwani, groups who made up the great majority of immigrants to the U.S. “Entrepreneurship,” in in the second half of the twentieth century, the comparison across The Oxford Handbook of Business History, ed. diff erent centuries was an important asset for the project. This litera- Geoff rey Jones and ture developed general concepts of immigrant entrepreneurship that Jonathan Zeitlin (Oxford, 2008), 501-28. helped us sharpen our understanding of the phenomenon in diff erent epochs and structure the questions of our project. In sharp contrast 11 For example, see Waldinger, “Immigrant to these sociological and ethnological studies, neither immigration Enterprise,” and Alejandro history nor business history has dedicated much systematic research Portes, ed., The Economic Sociology of Immigration to immigrant entrepreneurship up to now. (New York, 1995).

There is, however, considerable research on diaspora networks in 12 Ina Baghdiantz McCabe, Gelina Harlaft is, and 12 business history. Although immigrant and diaspora businesspeople Ioanna Pepelasis Minoglou, share many common characteristics, the former tend to stay in the Diaspora Entrepreneurial Networks: Four Centuries of destination country permanently, in many cases integrating into the History (Oxford, 2004).

BERGHOFF | IE PROJECT 55 new society and assimilating over the course of two to three generations. Diaspora businesspeople ﬁ ll economic gaps as permanent outsiders and remain distinct groups trying to preserve their distinct identity.13 In contrast, successful immigrants whose wealth is increasing try to integrate and move into the established bourgeoisie of their new countries. There can be an overlap between diaspora and immigrant business families, and boundaries might be far from clear in individual cases. Portes discovered “transnational entrepreneurs” among Columbians and Dominicans in the U.S. whose success mainly relies on close ties to their home country. These businesspeople constantly move back and forth and live in various places virtually simultaneously.14

This project focused on one important and oft en overlooked nationality and evaluated its contribution to the American economy. 1720 has been chosen as a starting point because around that year immigration reached a new dimension. Germans in particular were arriving in hitherto unprecedented numbers, which, however, were still modest compared to the peaks of the nineteenth century. The project covers this whole century, as well as the twentieth, which saw 13 Stephane Dufoix, Diasporas several fundamental changes in immigration patterns and business (Berkeley, 2008); Ioannides Stavros and Ioanna Pepelasis careers. It brings the story of German-American immigrant entre- Minoglou, “Diaspora preneurship right up to the present and addresses current debates Entrepreneurship between History and Theory,” in on immigration. The German-American case is particularly suited to Entrepreneurship in Theory and this kind of study as it exemplifi es the history of immigrant-related History, ed. Youssef Cassis and Ioanna Pepelasis Minoglou entrepreneurship in the U.S. in an outstandingly rich way. In detail, (New York, 2005), 163-89. there are four main reasons to justify this project’s focus on the 14 Alejandro Portes, Luis E. German-American case: Guarnizo, and William Haller, “Transnational Entrepreneurs: An Alternative Form of 1. Germans were one of the main sources of immigration to the Immigrant Economic United States. Today, some forty-three million U.S. citizens claim Adaptation,” American Sociological Review 6, no. 2 German heritage, which is about fi ft een percent of the total popula- (2002): 278-98; Steven tion. For much of the nineteenth century, Germans were the largest Vertovec and Robin Cohen, 15 eds., Migration, Diasporas, and group of immigrants. Transnationalism (Cheltenham, 1999); Steven Vertovec, 2. German immigration to American never dried up even if it declined Transnationalism (London, 2009). markedly in both absolute and relative terms over the course of the twentieth century. Economic crises, political upheavals, and the 15 “People Reporting Ancestry,” 2014 American Community persecution of minorities and political dissenters during the Nazi Survey 1-Year Estimates. U.S. period were strong push factors. The continuing attractiveness of Census Bureau, http:// factfi nder.census.gov/faces/ “the American Dream,” the multitude of economic opportunities for tableservices/jsf/pages/ immigrants, the country’s high level of wealth, and its appreciation of productview.xhtml?src=bkmk (accessed 21 July 2016). the entrepreneurial spirit acted as powerful pull factors — and still do.

56 GHI BULLETIN SUPPLEMENT 12 (2016) The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

3. German immigrants and their descendants played a dispropor- tionately large role in building up the American business community. This impact reached its pinnacle in the late nineteenth century, and it never became insigniﬁ cant thereaft er. This prominence of German Americans in the American business community can be assessed by statistical data. When New York was the ﬁ nancial hub of American industrialization and attracted business elites from all over the country, almost half of its wealthiest inhabitants were foreign-born. Among the 1,571 richest New Yorkers in 1870, 56 percent were na- tives and 44 percent foreign-born. Among the latter group Germans dominated. They represented almost one quarter of all top-wealth holders (23 percent) in the city, ranking well ahead of the Irish (11 percent) and the British (6 percent).16

4. In the rich literature on German immigration to the United States, entrepreneurs are oft en missing completely or only mentioned in passing. They seem to be the “forgotten siblings” of all the oft - mentioned farmers and craft smen as well as eminent intellectuals and scholars. For some reason or another, they seem to not have been deemed worth historical attention although they did so much to turn the U.S. into the world’s strongest economy. Although the majority of German immigrants in the nineteenth century were farmers or craft smen, a considerable number of businesspeople entered the country, too, and a considerable number of immigrants became businesspeople aft er entering the U.S. The emerging industrial economy off ered so many opportunities and the country was developing such an almost infectious infatuation with entrepreneurship that immigrants were literally drawn into the world of business.

Andrew Godley compared migrants of Jewish faith to London and New York between 1880 and 1914 and found that in New York immigrants with the same kind of background had a much higher propensity to become businesspeople. In fact, the percentage of busi- 16 Sven Beckert, The Monied nesspeople within the Jewish community increased in New York four Metropolis: New York City and the Consolidation of 17 times as much as in London at the same time. Obviously, not only the American Bourgeoisie, the demand for new entrepreneurs was larger but the value system 1850-1896 (Cambridge, 2001), 147. of American society also encouraged entrepreneurship to a signiﬁ - cantly higher degree than the European one did. The Horatio-Alger 17 Andrew Godley, Jewish Immigrant Entrepreneur- myth of rags-to-riches had an enormous radiance and it appealed to ship in New York and many German immigrants as they tried to adopt the cultural values London, 1880-1914: Enterprise and Culture of their host nation. (Basingstoke, 2001).

BERGHOFF | IE PROJECT 57 In the present discourse on immigration, there is little awareness of this very successful group. Germans are “among the least visible of American ethnic groups,”18 which in itself is a sign of successful integration and assimilation but also mirrors the legacy of the world wars of the twentieth century, which accelerated the dissociation of German-Americans from their country of origin.

The reason German-American entrepreneurs have so far received relatively little attention and why most of them did not even want to be identiﬁ ed as German Americans for a long time is deeply ingrained in the political history of the twentieth century. Prior to 1914, German Americans proudly presented themselves as eminent Americans of German origin. To mark the 225th anniversary of the arrival of Germans in Philadelphia in 1683, the “Deutsch-Amerikanische Nationalbund” published a 1,000-page “Book of Germans in America” in 1909. It explains how “Germans” helped win independence and the Civil War, and how they built universities and hospitals. German- American “captains of industry,” of course, had their own extensive chapter.

Germans generally encountered positive attitudes. On April 1, 1914, more than 4,000 people gathered in Ann Arbor to celebrate

18 Kathleen Neils Conzen, Bismarck’s birthday. The crowd applauded when the university’s “Germans,” in Harvard president said that 25 percent of the students were of German Encyclopedia of American 19 Ethnic Groups, ed. Stephan descent. Four exact copies of the Goethe–Schiller Monument of Thernstrom (Cambridge, MA, Weimar were commissioned by German Americans to celebrate their 1980), 405-25, here 408. cultural heritage. The monuments were erected in San Francisco 19 See http://www.celticgerman. (1901), Cleveland (1907), Milwaukee (1908), and Syracuse (1911). The com/ethnic-cleansing.html (accessed 20 July 2016). dedications of these respective monuments were well attended:

20 See, for example, Goethe– 30,000 people in San Francisco, 65,000 in Cleveland, and 35,000 Schiller Denkmal Gesellschaft in Milwaukee.20 In Cleveland, a congratulatory cable by German in San Francisco, “Das Goethe- Schiller Denkmal in San Emperor Wilhelm II was read aloud. German gymnastics clubs Francisco: Erinnerungen an (“Turner”), singing societies (“Sänger”) and many other German- den ‘deutschen Tag’ der California Midwinter Inter- American social clubs, thousands of German-language periodicals, national Exposition, 1894, as well as a plethora of festivals and parades bore witness to the rich an das ‘Goethe–Schiller Fest’ 1895 und an die ‘Enthüllung German-American culture and the proud “public display of German- des Denkmals’ im Golden ness” in late nineteenth- and early twentieth-century America.21 Gate Park, San Francisco 1901”; and Cleveland und Sein Deutschtum (Cleveland, Very soon neither self-congratulatory celebrations of German Ameri- A blank is missing 1907). cans nor their public praise was conceivable. The German-American 21 Willi Paul Adams, The German National Alliance (“Nationalbund”) had to suspend its activities in Americans: An Ethnic 1918 following a general rise in anti-German sentiment and a Senate Experience (Indianapolis, 1990), chapter 5. investigation. This sociopolitical umbrella organization, founded in

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1900 as German immigration had dropped to a sixty-year low, was meant to keep German-American culture thriving. Its membership was between two and three million before it had to fold. From then on most of this this group wanted to be inconspicuous largely for political reasons. The cultivation of their language and culture did not stop but lost much of its vigor. This tendency was strengthened by the Second World War and the Holocaust. German Americans became largely invisible for the majority of Americans. When new historical narratives came to the fore in the 1970s, nothing seemed more out of place than studying German-American capitalists. The new social history and, with it, the history of immigration concentrated on the proletariat, on farmers and craft smen.

This is why a sober look at the German-American business community was long impossible. When we conceptualized this project, we wanted to ﬁ ll that void without falling victim to worn-out stereotypes such as tales of exceptionalism and superiority. We aimed at an unbiased analysis with strong linkages to immigration and business history to allow comparisons with non-immigrant businesspeople and immigrant entrepreneurs from other countries. Openness to comparative research and interdisciplinary exchanges were priorities from the beginning.

In contrast to many immigration studies that confi ne themselves to the fi rst generation of foreign-borns, this project deliberately includes the second generation because social mobility and economic success in many cases only take place once the initial diffi culties of settling in have been overcome. The native-born children of foreign-born immigrants fi nd themselves in a unique position. They have much higher chances of integrating themselves into the culture of the new country and making use of the economic opportunities it off ers. At the same time, they have not yet lost the cultural heritage of their parents’ country of origin. In a way, some of them might have “the best of two worlds.”22

The general approach of combining individual biographies with the history of corporations was inspired by the highly praised British Dictionary of Business Biography,23 which was published in the 1980s and is still considered the state of the art for detailed business biog- 22 Hirschman, “Immigra- raphies. But our project was designed to move beyond that model and tion,” 597. fully utilize online publishing opportunities. Thus, the biographical 23 David J. Jeremy, ed., entries were published on an online platform that, at the same time, Dictionary of Business Biography, 5 vols. serves as a repository for additional source material like pictures, (London, 1984).

BERGHOFF | IE PROJECT 59 diaries, letters, business records, newspaper and magazine articles, as well as advertisements. In addition, to contextualize individual lives, general articles on various epochs, on immigration policy, economic history and special themes like female entrepreneurship are published alongside the biographies. All articles are generally available and can be used free of charge, especially for teaching and research purposes. This platform constitutes a unique and dense collection of historical source material on immigrant entrepreneurs and is meant to serve as a basis for further research. To facilitate the use of the dictionary as a teaching tool, the website also has study aids for college and graduate students as well as instructors.

Preliminary Outcomes It might be too early to conclude, but based on the broad empirical evidence, six preliminary results of our project stand out.

The Signifi cance of the German-American Experience We were struck by the sheer number of potential candidates from which we could make a selection. As already pointed out, the political history of the twentieth century dissociated German Americans from their country of origin. It was in their best interest to anglicize their names and hide their German roots. One example is Wilhelm Böing. He came to the U.S. in 1868 and became a timber magnate. His son, William Edward Boeing, founded a fi rm, which became the Boeing Airplane Company. Boeing today silently passes over that fact and presents itself as an all-American success story.24 Donald Trump, a third-generation immigrant from Germany, claimed to have Swedish roots. His father, a property developer, knew that German descent could harm his business and invented the Swedish connec- 24 Brian Schefk e, “William Edward Boeing,” in Immigrant tion in the 1920s. Trump repeated this tale over and over again up to Entrepreneurship: German- the 1990s.25 American Business Biographies, 1720 to the Present, vol. 4, ed. Jeff rey Fear. For this and all There are two examples from our sample among many more of people the other biographies cited who left an enormous footprint. Joseph Seligman was born into a from the project (IE), visit the website www. Jewish family in Franconia. To escape poverty and discrimination immigrantentrepreneurship. he emigrated to the U.S. in 1837. He worked fi rst as a railway clerk, org. then as a peddler. As he built up a successful mercantile business, 25 “Trump’s German Roots: Joseph encouraged his brothers to join him. The Seligman brothers Kallstadt’s King. How the German Heritage He Has turned their attention to California during the gold rush. They sold Hidden Shaped Donald mostly European products to the miners and sold Californian gold Trump,” Economist, 13 Feb. 2016, 171. in New York.

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In 1860 Joseph bought a clothing factory just in time to provide the Union Army with uniforms in the Civil War. From there it was a small step into government ﬁ nance as the government was unable to pay for the uniforms. Then Joseph Seligman helped President Lincoln raise funds in Europe. The Seligman brothers’ rise to the top of the U.S. banking community is remarkable. And they truly changed the course of American history. They helped the North to win the Civil War and the U.S. to remain solvent in the decades that followed.26

Henry Kaiser was a second-generation immigrant and built up a construction conglomerate employing 250,000 workers in the interwar period. His most important accomplishment was building 1,490 transport vessels for the U.S. Navy during World War II, without which the war eff ort could have hardly been won. Kaiser reinvented shipbuilding by transferring mass-production technology from car manufacturing to the shipyards. While the construction of the ﬁ rst “Liberty Ship” had taken 244 days, the average construction time soon dropped to forty days thanks to a modular building method.27 These examples should suffi ce to show that German-American entrepreneurs made a diff erence, even if only a small number had such a decisive inﬂ uence on the course of U.S. history as Seligman and Kaiser.

Diversity of Motives and Experiences The reasons for immigration and career patterns were manifold. Emigration in the seventeenth to nineteenth century was motivated by such diverse factors as religious discrimination or poverty, political upheaval, or military conscription. Many young men emigrated without permission in order to avoid military service. Some deserted from the Hessian units that fought alongside the British Army against American independence. Restrictions on marriages also played a role. Upgrades in transportation, better roads, and the removal of tolls 26 Elliott Ashkenazi, “Joseph Seligman,” in Immigrant on major German rivers in the 1830s made it easier and cheaper for Entrepreneurship (IE). would-be emigrants to reach port cities. The railroads greatly im- 27 Tim Schanetzky, “Henry J. proved transport before and aft er emigration from the 1840s. Sailing Kaiser,” in IE and his times and ticket cost greatly decreased. article in this volume. See also Tim Schanetzky, Regierungsunternehmer. Shipping companies sent out agents who actively canvassed speciﬁ c Henry J. Kaiser, areas and sold shipping contracts to prospective emigrants. Emigra- Friedrich Flick und die Staatskonjunkturen in den tion agencies relieved them of many obstacles. Very oft en relatives USA und Deutschland. Beiträge Zur Geschichte and friends in America encouraged emigration, paid for the journey, des 20. Jahrhunderts and helped emigrants settle in. (Göttingen, 2015).

BERGHOFF | IE PROJECT 61 The superior opportunity structure in North America was a strong pull factor. The availability of land, the scarcity of qualifi ed workers, high wages, and the oft en exaggerated reports in media and letters from earlier generations of immigrants motivated Germans to leave their homeland. The opening of government lands and land sold by railroads — both heavily advertised — encouraged many of them to cross the Atlantic and move westward. Later on, another pattern of emigration involved the deployment of employees of German fi rms or members of family fi rms. For some of them, a temporary stay morphed into permanent residency.

Some people led unusual lives and followed highly unusual careers, even engaging in illicit entrepreneurship. Impoverished Fredericka Mandelbaum (1825-1894) started as a peddler following her arrival in 1850 but then became New York’s most famous receiver of stolen property. The article on her life concludes: “She worked with the most gift ed shoplift ers, bank robbers, and thieves of the Gilded Age and made at least one million dollars over the span of her career.”28

In the twentieth century, crises in Germany repeatedly acted as push factors. The hyperinﬂ ation period, the Great Depression, and the poverty of the immediate postwar periods are the most salient examples. Besides, anti-Semitism und the Holocaust drove many Germans out of the country. Love also became a strong motive for immigration. The mother of television industry mogul John Werner Kluge took him to the U.S. in 1922 aft er having met a German-born widower visiting from Detroit.29 Aft er 1945, millions of American troops were stationed in Cold-War Germany; this circumstance, along with academic exchange programs, provided ample opportunities for German-American relationships to blossom. The publisher of children’s literature, Marianne Carus, married an American student whom she had met at Freiburg University in 1949 und relocated with him to Illinois.30

Aft er 1945, institutions of higher learning became important avenues of immigration and qualiﬁ cations for business life, especially in high-tech sectors. Andy von Bechtolsheim (b. 1955) co-founded Sun 28 Rona Holub, “Fredericka Microsystems in 1982 and later provided major funding for Google. A Mandelbaum,” in IE. Fulbright Award had brought the engineering student from the Tech- 29 Caitlin Cieslik-Miskimen, nical University of Munich to Carnegie Mellon University in 1975, “John Werner Kluge,” in IE. where he received a master’s degree in computer engineering. He 30 Jessica Csoma and Lillian then became a Ph.D. student at Stanford in electrical engineering. In Forman, “Marianne Carus,” in IE. 1982 he started Sun Microsystems together with Scott McNealy and

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Indian-American Vinod Khosla, another immigrant entrepreneur, who had attended Stanford Graduate School of Business.31 PayPal’s co-founder and later hedge fund manager and venture capitalist Peter Thiel (b. 1967) came out of Stanford Law School and used the cluster dynamics of Silicon Valley.32 John Kluge studied at Wayne College and Columbia University, gaining multiple chances to develop his business acumen along with his economics degree. He ran a shoe, garment, and stationery business and engaged in on-campus gambling, which almost cost him his scholarship.

Entrepreneurs as Transnational Actors Even aft er they settled in the U.S. for good, many businesspeople used connections to Europe to foster their American ventures. Heinrich Hilgard was born in 1835 to a ﬁ nancially comfortable family in Speyer, emigrated to the U.S. in 1853, and changed his name to an anglicized version of a former schoolmate’s name, Henry Villard. Becoming es- tranged from his father, neglecting his studies, and ﬁ nancial troubles seem to have motivated this step. Without any knowledge of English, he moved from one odd job to the other and seems to have survived through the support of the German community. He then made a career as a journalist and married an American: the daughter of the well-known abolitionist William Lloyd Garrison.

By the late 1860s Villard began marketing American securities abroad. Through the American networks of his father-in-law and his com- 31 Helmut Werb, Interview mand of German and English, he had enough contacts and fi nancial mit Andreas von competence to sell American securities in Europe. He convinced the Bechtolsheim, “Mich interessiert nur meine Frankfurt banker Jacob S. H. Stern to increase his American railroad Arbeit,” Karriere.de (http:// www.karriere.de/karriere/ investments. With German backing, Villard eff ectively bought up mich-interessiert-nur- most lines between Oregon and San Francisco and founded a railway meine-arbeit-9266/, empire that reached its apogee when the second transcontinental rail accessed July 20, 2016). connection, the Northern Pacifi c Railroad, was completed in 1883.33 32 Meghan O’Dea, “Peter Thiel,” in IE and her article He was a transatlantic intermediary, raisingamounts of money mainly in this volume; Mick in Frankfurt and New York, and had an enormous impact on the infra- Brown, “Peter Thiel: The Billionaire Tech Entre- structure of the U.S. Banks like J.P. Morgan — co-founded by Anton preneur on a Mission to Drexel — and Kuhn, Loeb & Company also linked the American and Cheat Death,” Telegraph, 19 Sept. 2014. the German capital markets. Many German-Jewish bankers fi nanced the exports of large German fi rms to the U.S. 33 Christopher Kobrak, “A Reputation for Cross- Cultural Business: Henry The fact that immigrant entrepreneurs not only moved between Villard and German Germany and the U.S. but also initiated fl ows of capital and prod- Investment in the United States,” in IE and this ucts and of skills and knowledge falls very much in line with the volume.

BERGHOFF | IE PROJECT 63 multifaceted eff ort now underway to situate the American past in a transnational framework. Immigrant entrepreneurs played a key role in the formation — and continuous re-formation — of the American business elite.

Immigration as Skills, Knowledge, and Technology Transfer The U.S. has always been able to tap into the qualiﬁ cations of immigrants and to strengthen its own skills base. This was particularly pronounced in sectors that grew out of craft traditions. Johann Andreas Albrecht (1718-1802) was a European-trained gunsmith who supplied arms to Pennsylvania during the American Revolu- tion and trained young riﬂ e makers in the eighteenth century.34 In the nineteenth century August and George Gemünder, producers of high-quality violins, thrived by continuing the Italian, German, and French violin-making tradition, “just as they combined European and American wood in a single instrument.” Their success was due to the merging of “European craft smanship with American production and marketing strategies.”35 There was also knowledge transfer outside the formalized apprenticeship system. Heinrich Steinweg, later Steinway, was originally a cabinet-maker and organ builder before he became an autodidact in piano construction.36

In the 1930s, Christian Heurich was the most prominent brewer in Washington, DC. Only the government owned more land and employed more people there. In Germany, Heurich had learned to brew beer in an apprenticeship. Aft er two years he went on his obligatory journeyman trip and learned diff erent brewing methods from various master brewers. He wanted to open his own brewery, which was impossible in Germany. The prospect of being able to do so in the US and the encouragement of his sister, led him to follow her in 1866. Aft er several years of work for various German-American brewers, he took over a run-down brewery in Washington. Heurich switched 34 Scott Paul Gordon, “Johann Andreas Albrecht,” in IE and the brewery from wheat beer to the barley-based, light lager he had his article in this volume. become familiar with during his time as a journeyman. The ensuing

35 Thomas Baumert, “George success would have been impossible without the thorough training Gemünder,” in IE. he had received in Germany.37

36 Claudius Torp, “Heinrich Engelhard Steinway,” in IE. Jacob Beringer (1845-1915), who like other European winegrowers brought skills and grapes to California’s Napa County, had worked 37 Mark Benbow, “Christian Heurich,” in IE. as an apprentice with a cellar master in Berlin and practiced the wine trade in Mainz prior to emigrating in 1868. He became one of 38 Kevin Goldberg, “Jacob Beringer,” in IE. the world’s most successful wine entrepreneurs.38 Claus Spreckels

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(1828-1908), probably the richest and most successful German- American entrepreneur of the late nineteenth century, imported knowledge and technology from Germany aft er he had come to the U.S. in 1848. Once he had moved into the sugar business, he repeatedly traveled to Germany to learn about beet-sugar production. He worked in a factory near Magdeburg, the center of the beet sugar industry of Germany. Later he set out on fact-ﬁ nding missions to various European countries and imported machinery as well as beet seeds from Germany.39

When brewer Adolphus Bush encountered quality problems, he took a series of trips to European brewing centers in Bohemia and Bavaria. The amount of back and forth was astounding. Connections to Germany remained intact and were used strategically. In other cases immigrant entrepreneurs imported skilled workers to staff their factories, especially as foremen and supervisors.40

The Transitory Character of the Ethnic Enclave German immigrant businesspeople generally did not remain isolated from their new environment for long. The German-American community did provide essential support at the initial stage from the 39 Uwe Spiekermann, “Claus Spreckels: Robber Baron ﬁ rst orientation in the new environment to social provisions through and Sugar King,” in IE. institutions like the German General Benevolent Society. The ethnic 40 Sven Beckert, “Migration, enclave was an important stabilizing factor without inhibiting as- Ethnicity, and Working similation and expansion. Most immigrant entrepreneurs learned to Class Formation: Passaic, New Jersey, 1889-1926,” speak English pretty fast and built up contacts to other ethnic groups. in People in Transit: Even if their customer base was initially German, they sought to ex- German Migrations in Comparative Perspective, pand it sooner rather than later. They chose English product names 1820-1930, ed. Jörg Nagler and Dirk and advertised mainly in English, and they displayed a high degree Hoerder (Cambridge, of regional mobility. 1995), 347-79.

41 Berti Kolbow, “John The optical industrialist John Jacob Bausch began by selling products Bausch,” in IE. from home through advertising in a German-language newspaper, 42 Robert C. Alberts, Good but once he moved into an arcade in the center of Rochester in 1853, Provider: H. J. Heinz and his customer base outgrew the German community.41 Henry John His 57 Varieties (Boston, 1973); and Nancy F. Heinz sold his processed foodstuff s to all ethnic groups from the Koehn, “Henry Heinz and beginning although some of his recipes had German origins.42 Emil Brand Creation in the Late Nineteenth Century: Julius Brach (1859-1947) opened a small candy shop in Chicago’s Making Markets for Pro- largely German-American North Side in 1904 out of which grew “the cessed Food,” Business History Review 73, no. 3 world’s largest maker of popular-priced bulk candies.” The move (1999): 349-93. from the neighborhood store to the mass market was a step out of 43 Leslie Goddard, “Emil the conﬁ nes of the ethnic enclave.43 Julius Brach,” in IE.

BERGHOFF | IE PROJECT 65 All businesspeople in our sample fostered an image of themselves as American entrepreneurs even if they remained a part of German- American networks and preserved German traditions in their private lives. At least until 1914, many ostentatiously cultivated their cultural roots by means of clubs and churches or synagogues, the education of their children — oft en in Germany — and by maintaining the German language. In a way these entrepreneurs had a dual identity and enjoyed the best of two worlds. In the twentieth century, pressure to assimilate mounted, with third and later generations losing interest in their roots. Whereas links to Germany and German culture weakened, there were several cases especially aft er 1970, in which immigrant entrepreneurs from Germany never even entered the German-American scene.

However, there was ambivalence even before the First World War. From 1858, Henry Miller built up America’s largest integrated cattle and meatpacking enterprise from a butcher shop in San Francisco. Although he benefited tremendously from German-American networks on the West Coast, he “displayed almost no desire to stay connected to his German cultural roots.” Unlike the majority of German-American entrepreneurs, he “avoided participating in the social activities of the German community of San Fran- cisco” and never joined “any of this group’s many associations.” “All of his correspondence, even with other German companies” and with his own German employees and German friends, was “written in English.”44

The American Dream was Real, at least for Some The project recorded spectacular cases of upward social mobility. On the one hand, this was to be expected as we selected biographies on the basis of “signiﬁ cance,” which was oft en but not always tantamount to economic success. On the other hand, these rags-to- riches stories are astonishing by their magniﬁ cence. As icons of the American dream and sociocultural scripts, they attracted further immigrants in large numbers.

John Jacob Astor (1763-1848) was well known in Germany, nurtur- ing the hopes of many to be able to imitate his success. The son of an impoverished butcher, he excelled in fur trading and moved into real estate. Due to the beginning boom of New York, he became 44 Britta Waldschmidt-Nelson, the ﬁ rst multimillionaire of the U.S. It was impossible for most im- “Henry Miller: The Cattle King of California,” in IE. migrants to follow Astor’s example. Failure and disappointment

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prevailed among those who wanted to become rich in America. Even those who accumulated considerable wealth later on oft en went through struggles and ﬂ ops.45 Astor did not remain the only self-made millionaire. Claus Spreckels, a former farmhand, arrived virtually penniless but died one of the wealthiest Americans of his time.

These kinds of meteoric careers were not limited to the nineteenth century. Christel DeHaan, who met her husband on a U.S. army base in Germany and followed him to Indianapolis in 1962, started an ironing and typing business in her home. Later she built up a timeshare-vacation business. When she sold her company in 1996, she became one of the wealthiest American women.46 Lillian Vernon (1927-2015) was one of the most successful female entrepreneurs in the U.S. She was born into a wealthy Jewish family in Germany that fl ed the Nazi regime. With an entrepreneurial spirit inherited from her family but without their fi nancial backing, the “Queen of Catalogs” built her mail-order empire from scratch, “to be precise from her kitchen table. . . . 30 years later her company” became the fi rst business founded by a woman to be publicly listed on the New York Stock Exchange.47

Conclusion It is hard to summarize the varied ﬁ ndings of this rich project. I’ve presented some key aspects. I hope it has become clear that these biographies deserved to be taken out of obscurity. The project has demonstrated that immigrant entrepreneurs matter even though general historical accounts hardly ever acknowledge their signiﬁ - cance. The transnational dimension of the U.S. rising to become an economic superpower is regularly missing, and this project amply demonstrates that the ability to draw on immigrant entrepreneurship has always been a key factor in the economic dynamism of the United States.

It is for others to evaluate the quality of the articles on the project’s website. In all modesty, I do believe that this online dictionary adds signiﬁ cantly to our knowledge of immigration and entrepre- 45 Alexander Emmerich, “John Jacob Astor,” in IE. neurship. The facets of these lives have increased our knowledge of the German-American community, of U.S. business history and 46 Dane Starbuck, “Christel DeHaan,” in IE. the value of immigrant entrepreneurship in general. These ﬁ ndings have not only a high scholarly value but also important policy 47 Ute Mehnert, “Lillian Vernon,” in IE and her ar- implications. ticle in this volume.

BERGHOFF | IE PROJECT 67 Hartmut Berghoff was director of the German Historical Institute Washington DC from 2008-2015. He currently is director of the Institute for Economic and Social History at the University of Göttingen. He has researched and taught at the University of Bielefeld, the University of Tübingen, Humboldt University Berlin, the Beisheim Graduate School of Management Koblenz, Harvard Business School and Maison des Sciences de l’Homme, Paris. For his extensive publications in the ﬁ elds of business history, cultural and economic history, and the history of consumption and consumerism, Hartmut Berghoff has received numerous awards and honors. He serves on the editorial boards of several journals.

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A CREDIT TO THEIR NATION: EASTERN EUROPEAN JEWISH IMMIGRANT “BANKERS,” CREDIT ACCESS, AND THE TRANSNATIONAL BUSINESS OF MASS MIGRATION, 1873-1914

Rebecca Kobrin

The summer of 1914 thrust the world into an unfathomable war. The gruesome events in Europe oft en overshadow the transfor- mations that took place on the other side of the Atlantic. Indeed, one of the fi rst casualties of the war in America was the world of immigrant banking, a network of enterprises that had fi nanced and fueled mass migration through its sales of ship tickets on credit. But as ships used by the Hamburg America Line were seized by the Kaiser to transport troops, entrepreneurial immigrant bankers faced a crisis of their own. Much ink has been spilled on the mounting fi nancial crisis that unfolded as political crisis escalated in Europe. Less is known of the reverberations in 1 Liaguat Ahamed, Lords of Finance: The Bankers the United States. While New York State banking offi cials were Who Broke the World (New uncertain of the damage that war would cause European fi nancial York, 2009), 29-32. centers, they remained confi dent that the “neutral” United States 2 The editorial pages of the and its fi nancial capital in New York City would continue to oper- Yiddish press capture the terror that seized the Jew- 1 ate unscathed. But as war became inevitable, immigrants in New ish immigrant community York panicked.2 Fearing the worst, thousands ran to withdraw their upon seeing the events of July 1914 unfold. See savings from their “banks” to transmit back to their countries of Forverts, July 31,1914, 4; origin in Europe. and August 14, 1914, 5; Varheyt, Aug. 1, 1914. For a discussion of the larger Overwhelmed by the sea of depositors rushing in to take out their reaction to the outbreak of war in the Yiddish press, money, several of the largest Jewish immigrant banks were forced to see Joseph Rappaport, suspend business. Even though these institutions were not chartered “The American Yiddish Press and the European by the state, Eugene Lamb, New York State Banking Superintendent, Confl ict in 1914,” Jewish closed the banks of A. Grochowski, the Deutsch Brothers, Adolf Social Studies 19, no. 3/4 (1957): 113-28. See, in Mandel, M & L Jarmulowksy, and Max Kobre because he felt that particular, Forverts, July they did not have enough funds in reserve to return their depositors’ 29, 1914. 3 assets. The Jarmulowsky bank alone had 15,000 depositors with 3 “Information RE: Private over $1,667,000 in deposits in the bank.4 It had sold hundreds of Bankers,” P3/1542, Judah Leib Magnes Papers, Cen- thousands of ship tickets in the foregoing decades. But that paled tral Archives for the His- in comparison to the banks of Max Kobre, who had branches on the tory of the Jewish People, Jerusalem. Lower East Side and in Brooklyn that claimed over 23,000 depositors who had entrusted $3,700,000 to him aft er booking their passage 4 Ibid. through his fi rm.5 5 Ibid.

KOBRIN | JEWISH IMMIGRANT “BANKERS” 69 Enraged, the depositors organized a protest to make their “struggle” known.6 “A mob of 5,000 depositors angered by their inability to draw their deposits,” reported the New York Times, staged a “demonstration” in front of Sender Jarmulowsky’s bank on Orchard Street to express their outrage with “the State Banking Department, and the District Attorney, who, they thought, should get their money back for them.”7 Carrying Yiddish banners proclaiming “the 60,000 un- fortunate depositors of the East Side banks demand their rights from the Governor of New York State,” the mob marched to city hall where they attacked clerks. Reserve policemen were called in as “clubs were swung and ﬁ sts were struck out.”8 The riot ended with police arresting nine men and women. 6 “Depozitors poderen az di ar- beyter bavegung zol oypnemen zeyr kampf,” Forverts, Aug. 30, The riot concerned New York City’s offi cials as it raised questions 1914, 1. about the stability of banking institutions in New York City, the ﬁ nan-

7 “5,000 RIOT IN FRONT OF cial capital of the United States. Since 1863, New York had served as CLOSED BANKS; Reserves the backbone of the expanding U.S. banking system.9 Banking riots Called to Disperse East Side Depositors Who Demand in New York City had to be addressed immediately. Uncovering that Their Money; MARCH TO SEE much of this institution’s missing assets were tied up in real estate WHITMAN, Police Forced to Use Clubs to Quell Angry investments that could not be quickly liquidated, the New York State Crowd,” New York Times, Aug. Banking Superintendent would act decisively, and would urge the 30, 1914, 10. courts and state legislators to craft new laws requiring increased regu- 8 Ibid. lation of private immigrant “banks.” These new laws fundamentally 9 Richard Sylla, “Federal Policy, altered the practice of immigrant banking in New York City, a city Banking Market Structure, and that functioned as the pre-paid ship-ticket sales capital of the world. Capital Mobilization in the United States, 1863-1913,” Within a few years, hundreds of other entrepreneurial immigrant busi- Journal of Economic History 29 nesses that similarly made a profi t from selling ship tickets through (1969): 657-86. Under the national banking system, na- fi rms based in Germany were forced to shut down. But such drastic tional banks outside of New York were required to maintain measures were deemed necessary by New York state offi cials who 15 percent of their reserves, believed such regulation would protect New York State from other of which three-fi ft hs, or 9 per- 10 cent, was held on deposit in failures and riots. New York. If a bank were seen as failing in New York City, it The coming pages draw from a larger project that raises questions could create a panic throughout the country. about the place of immigrant banking in early-twentieth-century America, highlighting the historic interplay between banking regula- 10 Daniel Hochfelder, “Where the Common People Could Specu- tion and immigrant entrepreneurship in American history. Through late: The Ticker, Bucket Shops, its close analysis of the rise and fall of the world of Eastern European and the Origins of Popular Participation in Financial Mar- Jewish immigrant banking, my larger project reinserts Eastern kets, 1880-1920,” Journal of European Jewish immigrant bankers into the narrative of American American History 93 (2006), 335-58, here 340; Jackson economic history. Moreover, these immigrant entrepreneurs demon- Lears, Something for Nothing: strate the role entrepreneurs have played historically in economic Luck in America (New York, 2003). change, not only by opening new markets but by also prodding the

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state to create new regulations.11 To be sure, the inﬂ uence of Jews on banking in the United States is far from unchartered territory.12 But when asked how immigrant Jewish entrepreneurs and their business practices shaped twentieth-century American banking, most scholars would rattle off the names of famous German-Jewish immigrant bankers such as Jacob Schiff , Paul Warburg, and Henry Lehman, who shaped the investment banking sector. However, isolating a few prominent examples of Jewish economic achievement obscures the formative roles unregulated Eastern European Jewish-run immigrant banks played at the turn of the twentieth century; these banks with offi ces in New York and German port cities faded into oblivion aft er 1914. Part of a broader trend in banking catering to immigrants, entrepreneurial Eastern European immigrants deployed innovative credit mechanisms and speculative investment strategies that shaped the very process of migration to the United States. The credit that these institutions off ered to immigrants directly contributed to their ability to come to America and their economic prac-

tices once they arrived. The rise and fall of these transnational Jewish 12 Stephen Birmingham, immigrant businesses left an imprint far beyond one community, as Our Crowd: The Great Jewish Families of New York the system of American banking regulation took shape in direct re- (Syracuse, 1996); Vincent sponse to risks taken by these immigrant entrepreneurs and the un- P. Carosso, “A Financial Elite: New York’s German- regulated ﬁ nancial institutions they founded. Jewish Investment Bankers,” American Jewish Historical Quarterly 66, Throughout my project, I use Jewishness as the lens through which to nos. 1-4 (September look at the world of immigrant banking — but we must remember that 1976-1977); Barry E. Supple, “A Business Elite: this was a diverse world with individuals from many diff erent coun- German-Jewish Financiers tries and backgrounds. Working in their respective immigrant com- in Nineteenth-Century $ New York,” Business munities, immigrant bankers together transferred over 300,000,000 History Review 31 (1957): overseas to dozens of diff erent countries in 1909 alone.13 By examining 143-78; Naomi Cohen, Jacob H. Schiff : A Study in American Jewish Leader- 11 The role entrepreneurs of Economic History 7 Wadhwani and Geoff rey ship (Hanover, NH, 1999); play in taking advantage (1947): 149–59; idem, Jones, “Schumpeter’s Susie Pak, Gentlemen of and creating new mar- “Economic Theory and Plea: Historical Methods Bankers: The World of J. P. kets has been discussed Entrepreneurial History,” in the Study of Entre- Morgan (Cambridge, MA, by many interested in in Change and the Entre- preneurship,” Academy 2013). economic growth. Fewer preneur: Postulates and of Management Best Pa- discuss how they set eco- Patterns for Entrepreneu- per Proceedings (2006), 13 United States Senate, Re- nomic change in motion rial History, ed. Robert R. revised and republished ports of the Immigration by prodding the govern- Wohl (Cambridge, 1949), as “Schumpeter’s Plea: Commission: Immigrant ment to increase regu- 63-84; William Baumol Historical Reasoning in Banks, 61st Congress, 3rd lation. Several classical and Robert J. Strom, “En- Entrepreneurship Theory Session, Vol. 37, Senate approaches to studying trepreneurship and Eco- and Research,” in Orga- Doc. 753 (Washington, entrepreneurs and economic Growth,” Strategic nizations in Time: History, DC, 1911 [reprint, 1970]) nomic growth are Joseph Entrepreneurship Journal Theory, Methods, ed. [hereaft er referred to as Schumpeter, “The Cre- 1 (2008), 233–37. For a Marcelo Bucheli and R. Reports of the Immigrati- ative Response in Eco- general overview of this Daniel Wadhwani (New on Commission, Vol. 37], nomic History,” Journal theme, see R. Daniel York, 2014), 192-216. 260-64.

KOBRIN | JEWISH IMMIGRANT “BANKERS” 71 primarily Jewish immigrant banking entrepreneurs, I deal head-on with the anti-Semitic implications that have pervaded any inquiry into Jewish economic history. Ever since Werner Sombart wrote his 1911 Die Juden und das Wirtschaft sleben [Jews and Modern Capitalism], which held Jews responsible for bringing capitalism into the world, the question of distinctive Jewish ﬁ nancial practices, proclivities, or behaviors has been avoided in scholarship.14 Such avoidance obscures how in early twentieth-century Europe, immigrant Jews from Eastern Europe struggled to gain a foothold in Europe’s dynamic economy. Discriminated against in Tsarist Russia, Germany and the United States, Eastern European immigrant Jews were forced to experiment with new credit arrangements to address their unmet needs. Some of these experiments succeeded while others failed, but they

14 Werner Sombart, The Jews and all deserve attention, as U.S. historian David Hollinger points out, Modern Capitalism, trans. M. because the absence of any straightforward historical and social- Epstein (London, 1913; repr. New Brunswick, 1982). Re- scientiﬁ c study into what enabled Eastern European immigrant cent scholarship that grapples Jews to succeed economically in the United States has perpetuated with Jewish economic behav- 15 ior notes the shadow cast by a mystiﬁ cation of Jewish history. Through close analysis of the Sombart. See Jonathan Karp, business methods, international trade networks, and credit mecha- The Politics of Jewish Com- merce: Economic Thought and nisms of the two most prominent Eastern European Jewish immi- Emancipation in Europe, 1638– grant bankers, Sender Jarmulowsky and Max Kobre, who worked in 1848 (Cambridge, 2008), 268– 69; Derek J. Penslar, Shylock’s both Hamburg and New York City, I will highlight the ways these Children: Economics and Jewish entrepreneurial immigrants transformed not only the world of im- Identity in Modern Europe (Berkeley, 2001), 256–62; Jerry migration but commercial banking and its regulation in the United Z. Muller, Capitalism and the States as well. Jews (Princeton, 2010), 1–3.

15 David Hollinger, “Rich, Pow- erful, and Smart: Jewish Over- The Problem of the Immigrant “Banker” in the United States representation Should Be Explained Rather than Mysti- In the numerous early twentieth-century conversations concerning ﬁ ed or Avoided,” Jewish Quarterly Review 94 (Fall immigration, nothing troubled U.S. offi cials more deeply than the 2004): 596. growing ranks of unqualiﬁ ed immigrant entrepreneurs who called 16 16 Jeremiah W. Jenks and W. themselves “bankers.” Unlike traditional bankers who worked in Jett Lauck, The Immigration businesses that possessed state charters, these immigrant busi- Problem: A Study of American Immigration Conditions and nessmen usually did all their business in a foreign language and Needs (New York, 1911), xv, 96. operated out of other commercial enterprises, such as saloons, This idea is further expanded 17 in Reports of the Immigration grocery stores, bakeries, or boarding houses. Most importantly, Commission 37:212-13. their banks were not chartered or regulated by any governmental

17 Jared N. Day, “Credit, Capi- authority. Thus, they did not hold funds in reserve as state-chartered tal and Community: Informal banks were expected to do. As the 1909 Senate Commission on Banking in Turn-of-the- Century Immigrant Commu- Immigration bemoaned, this lack of regulation enabled these enter- nities in the United States, prises to use the deposits left with them for a myriad of speculative 1880-1924,” Financial History Review 9, no. 1 (2002): 65-78. investments. Describing the methods by which immigrants become

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ensnared by immigrant bankers, the Senate Commission noted in its report:

Nothing is more natural than that the immigrant should take his savings to the agent [who brought him to America] and ask that the agent send them home for him. Having made the start, it is natural that he should continue to leave with the agent for safe-keeping his weekly or monthly surplus, so that he may accumulate a suffi cient amount for another remittance or for the purpose of buying a steamship ticket to bring his family to this country or to return to Europe. It is not long before the agent has a nucleus for a banking business and his assumption of banking functions quickly follows.18

Few individuals better illustrated the ways in which ship-ticket brokers developed into bankers in the United States than Sender Jarmulowsky. Born in 1841 in Grajewo, in the Lomza province of Russian Poland, Jarmulowsky was orphaned at the age of three and then raised by the rabbi of Werblow.19 Growing up close to the German border, Jarmulowsky was fluent in German, Russian, Polish, and Yiddish. Impressed by Jarmulowsky’s intellect, the rabbi sent him to the Volozhin Yeshiva, where he received rab- binical ordination.20 As was common in Lithuania, though penniless, Jarmulowsky made a good match with Rebecca Markels, the daughter of a wealthy merchant, on account of his great intellect.21 20 On the highly esteemed While this match enabled Jarmulowsky to pursue his career in reputation of the Volozhin the rabbinate on a full-time basis, he opted instead to enter the Yeshiva, see Shaul Stampfer, Yeshivah business world. ha-Litait be-hithavutah (Jerusalem, 1995). Im- In 1868, Jarmulowsky and his new wife moved to Hamburg, where manuel Etkes, Yeshivot Lita: Pirke Zik hronot he opened a “passage and exchange” offi ce through which he bought (Jerusalem, 2004), paints and sold steerage class tickets to the United States. Jarmulowsky was a vivid portrait of life in this yeshiva and the high regard a business innovator in the ways he connected individual migrants its graduates enjoyed. to larger shipping companies. He pioneered a system that extended 21 Glenn Dynner, Men of Silk: credit to prospective passengers and sold them prepaid tickets on The Hasidic Conquest of Po- land (New York, 2006), ch. 4; Shaul Stampfer, “Heder 18 Reports of the Immigration banking, but its limita- 19 “Yarmulowski gebrakht Study, Knowledge of To- Commission 37:212-13. tions are nicely summed tsu kvure mit groys rah, and the Maintenance To be sure, this report up by Oscar Handlin in koved [Jarmulowsky of Social Stratiﬁ cation in is a rich primary source his Race and Nationality was brought to his buri- Traditional East European on the multi-ethnic in American Life al with great respect],” Jewish Society,” Studies in character of turn-of- (New York, 1957), Morgn zhurnal, June 4, Jewish Education 3 (1988): the-century immigrant 93. 1912. 271-89.

KOBRIN | JEWISH IMMIGRANT “BANKERS” 73 installment.22 He built his fortune by arbitraging these prepaid tickets, which were valid for a year. His business model revolved around purchasing hundreds of tickets in bulk from the Hamburg America

22 Torsten Feys, “Prepaid Tickets Line when prices were lower during the winter season; he then wrote to Ride to the New World: out the tickets to ﬁ ctive people since name changes on tickets were The New York Continental Conference and Transatlantic processed at no extra charge. During the summer months, when Steerage Fares 1885-1895,” prices increased, he sold these tickets to prospective migrants with an 2-3 (I would like to thank Torsten Feys for sharing this extra proﬁ t margin. Charging 6 percent more for tickets paid in four article with me). Jarmulowsky, installments, Jarmulowsky off ered credit to poor migrants who had who worked in Germany, used methods developed in Eng- few other credit options so that they could buy their tickets. If prices land earlier in the century. See dropped or tickets could not be sold in time, his loss was limited to Nicholas Evans, “The Role of Foreign-Born Agents in the the 5 percent cancellation fee.23 Development of Mass Migra- tion through Britain, 1820- 1923,” in Maritime Transport Jarmulowsky became a critical middleman for shipping lines by and Migration: The Connections developing a new multilingual ticket, with which he drew pro- between Maritime and Migrati- on Networks, ed. Torsten Feys spective migrants from all over Eastern Europe to his offi ce. The et al. (St Johns, 2007), 49-61; biggest challenge facing maritime companies was attracting as Pamela Nadell, “From Shtetl to Border: East European Jew- many migrants as possible to fill their boats. They relied on a ish Emigrants and the ‘Agents’ host of agents in ports of embarkation to do this job, as they did System’, 1868–1914,” in Stu- dies in the American Jewish Ex- not have the networks nor the languages to reach prospective mi- perience, Vol. 2, ed. Jacob R. grants. Through his use of an addendum that translated the ticket Marcus and Abraham J. Peck (Cincinnati, 1984), 49-78. terms into eight diff erent languages, Jarmulowsky made sure all his clients, regardless of where they hailed from, understood the 23 CII IV: Die Behörde für das Auswandererwesen Hamburg: terms of their tickets. This boilerplate document earned him the Folder IV B I:, no. 14: Sender trust of many prospective migrants, linking them not only to ship- Jarmulowsky, Folder No. 3323: Alexander Jarmulowski ping companies but to a larger world system that saw migrants [1873], No. 36268 Albert as commodities.24 Jarmulowski [1890, 1896, 1901], Staatsarchiv Hamburg. The following New York Civil Selling tickets on installment along with his translation addendum Court cases also describe this business system: Sender helped make Sender Jarmulowsky immensely successful; yet he Jarmulowsky vs. Oscar was nonetheless denied residency in Hamburg (as a result of his Rose, November 11, 1889 [JL-1889-351]; M. Rosencranz birth in Eastern Europe). He ventured to America in 1873, leaving v. S. Jamelowsky [sic], Fourth his son who had just married into an established Hamburg Jewish District Court, September 28, 25 1890. This case is discussed family to run his offi ce in Hamburg. He expanded his business by further below. off ering Eastern European Jewish immigrants already in the United

24 Dirk Hoerder, “Segmented States a way to “pay out” in installments the cost of bringing their Microsystems and Network- European relations to America. His business quickly ﬂ ourished. As ing Individuals: The Balanc- ing Functions of Migration S. L. Blumenson recalled, “on the [Rutgers] Square stood the green, Processes,” in Migration, Mi- iron-grilled skyscraper which housed the Jarmulowsky bank, a gration History, History: Old Paradigms and New Perspecti- ves, ed. Jan Lucassen and Leo 25 On the diffi culties East- concerning residency and Hamburg and Manchester, Lucassen (Bern, 1997), 73-84, ern European Jews faced status see Rainer Liedtke, 1850-1914 (New York, here 84. in Hamburg in this era Jewish Welfare in 1998), 142-63.

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name known in every town, village and hamlet across Europe. It was Jarmulowsky who provided the shiff skarten, the steamship tickets, to probably half the immigrants during the last two decades of the nineteenth century.”26

As Blumenson’s recollections evocatively capture, “bank” and “ship ticket salesman” were interchangeable terms in the Eastern European Jewish immigrant world. Soon, by not only extending credit but also operating in the foreign currency markets and taking deposits, » Transatlantic Steerage Fares 1885–1895,” Revista Jarmulowsky became known by “every Jew in both the old and new de Historia Económica 26 world.” 27 His business dealings “brought him into contact with thou- (2008): 173-204, here 176. See The Holland sands of immigrants” as he booked their passage through his offi ce, America Line Collection since “the name Jarmulowsky was the guarantee of honesty.”28 Sender (hereaft er GAR, HAL) Folder 318.04: Passage Jarmulowsky was one of the brokers, as W. H. Van den Toorn of the Department, 221-226, Holland America Line pointed out, who had cornered the market on Letters June 14, August 6, 23, September 5, & pre-paid tickets through his “passage and exchange offi ces” in September 19, 1895. New York and Hamburg.29 30 Erich Murken, Die grossen transatlantischen Investigations by shipping companies along with court cases Linienreederei-Verbände: shed light on how entrepreneurial Jewish immigrant brokers like Ihre Entstehung, Organi- sation und Wirksamkeit Jarmulowsky continued to make money off each ticket sold on install- (Jena, 1922), 44-50. ment throughout the 1890s despite shipping companies’ increased 31 Van den Toorn was the regulation of the market. Starting in 1885, the largest European representative of the Holland American Line shipping lines — the Holland America Line, North German Lloyd, in New York City who Hamburg America Line and the Red Star Line — joined together launched the investigation. He reports that to form the Continental Conference to regulate competition on the one women was charged transatlantic fares and maximize their profi ts.30 One result was a $59.50 for her passage and that of her child coordinated eff ort by the shipping companies to investigate agents from Antwerp to New selling tickets on installment as American offi cials were increasingly York while the gross rate charged by the lines penalizing shipping lines for the growing number of impoverished amounted to $44.25. See passengers arriving claiming they had debts (as a result of buying GAR, HAL, 318.04, Pas- sage Department, 221- their tickets on installment). Employing a group of detectives pos- 226, letter July 8, 1899. ing as migrants, several of the main shipping lines caught Jewish He notes the same margin was used by Max Kobre: immigrant bankers such as Max Kobre, Sender Jarmulowsky, the see GAR, HAL, 318.03, Markel Brothers, and others who all required a down payment of Passage Department, 563, minute 122 October 22, 31 fi ve to ten dollars followed by weekly installments of one dollar. 1896, 541 August 15, As a result, the shipping lines imposed fi nes on Jarmulowsky and 1900. All these sources are quoted in Torsten all other ship ticket salesmen they found off ering credit through Feys, “A Business Ap- the sale of tickets on installment. proach to Transatlantic Migration: The Introduc- tion of Steam-Shipping 26 S. L. Blumenson, “Culture 27 “Reb Sender Yarmulowski,” 29 Torsten Feys, “Prepaid and Its Impact on the on Rutgers Square,” Tageblat, June 2, 1912. Tickets to the New World: European Exodus, 1840- Commentary 10 (1950): The New York Continen- 1914” (Ph. D., University 66. 28 Ibid. tal Conference and » of Ghent, 2008), ch. 3.

KOBRIN | JEWISH IMMIGRANT “BANKERS” 75 Fines imposed by the shipping lines, however, did little to deter the agents from selling on installment as illustrated by an 1890 New York State Supreme court case — Michael Rosencranz v. Sender Jarmulowsky. As one of Sender Jarmulowsky’s clerks testifi ed at an 1890 trial, Jarmulowsky made up to $16 profi t per ticket. As the clerk noted, during the winter season, Jarmulowsky purchased tickets for $8 and $9, and he sold them “for up to $24 (during other seasons).”32 Indeed, Rosencranz was suing Jarmulowsky because tickets he had arranged to pay on installment in New York for $10 and to be sent to Jarmulowsky’s offi ce in Hamburg for his wife and children were not honored. But while Jarmulowsky may have made a handsome profi t, he was trustworthy. Indeed, Rosencranz’s wife was stranded in Hamburg, as the trial revealed, because six weeks earlier her husband had booked passage with another ship ticket salesman by the name of Wolff , whose business failed, leaving his wife with no ticket to reach the United States. Aft er receiving a letter from her husband that he had purchased tickets at a certain price for her and the rest of the family at the Jarmulowsky bank, she went to the Jarmulowsky offi ce in Hamburg to claim her ticket. The Jarmulowsky branch offi ce denied this purchase. At her wit’s end, she paid a higher price for the tickets aft er a clerk in Hamburg told her (as he testifi ed in the trial), “Payment in full is always required. Because the price of tickets change[s] sometimes and we want to satisfy [the purchaser] that if the prices are higher, we won’t ask for more payment.” Rosencranz sued Jarmulowsky to return the extra money his wife had paid, since he had arranged a diff erent price on installment. Ultimately, Rosencranz lost his case, but not because he did not suffi ciently prove his claim. Rather, the judge did not feel it was in his jurisdiction to adjudicate a business dispute concerning a transaction that actually transpired in Germany. Indeed, the transnational character of Jarmulowsky’s entrepreneurial dealings saved him from being penalized in New York City Civil Court.

32 M. Rosencranz v. S. Jamelowsky [sic], Fourth Dis- Investigations of Max Kobre’s business further demonstrate how trict Court, September 28, ship-ticket sales on installment became the bedrock of Jewish im- 1890, found in the New York Civil Court Archives, Cham- migrant banking. Kobre worked in Hamburg as well with his father bers Street, New York. in law, Samuel Hershmann, who ran a boarding house at the docks.

33 In the matter of Max Kobre and Seeing that guests in the boarding house were all looking for a reli- Moses Ginsberg, co-partners able ship ticket salesman, he began selling ship tickets. But New doing business as Max Kobre’s Bank at 1783 Pitkin York City had become the center for ticket sales by the 1880s. Leav- Ave, Brooklyn, NY, November ing his brother-in-law in Hamburg, Kobre soon ventured to New 13-18, 1914, Folder 5263 NARA, p. 253. York City in 1882 to expand his business.33 Kobre employed a wide

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range of newcomers who worked as peddlers to sell tickets to many diff erent ethnic groups. As historian Torsten Feys points out, Kobre soon became infamous among representatives of the British and Dutch shipping lines for his practice of selling tickets on installments through these newly arrived peddlers.34 Kobre also introduced new selling methods such as cheaper cash orders, enabling him to further pierce the divided ethnic markets common in the sale of ship tickets. In fact, Kobre sold so many tickets that the Holland America Line secretly sent an agent to investigate his business practices in the 1894. As Van den Toorn, the representative of the Holland America Line in New York, reported, Kobre exempliﬁ ed the corrupt business practices of Eastern European Jewish entrepreneurs; their sale of ship tickets on installment through peddlers proved impossible to eradicate as they undersold the shipping lines’ established rates. While ﬁ ned for his practices, Kobre resumed his business in less than a week as the demand for prepaid ship tickets on installment was so high.

As the trial and shipping line investigations highlight, trust was central to the treacherous business of mass migration. Would-be passengers had to make sure that they were giving over their life savings to a person who would safely transport their families to their desired destination and charge them fairly. Indeed, Jarmulowsky’s success hinged on his appreciation of these concerns and his ability to use his unconventional banking role to his business advantage. Speciﬁ cally, he stressed his piety (reinforcing the impression that as a rabbi he would not cheat his customers) and focused his eff orts on ensuring that people reached their destinations. As Louis Lipsky recalled about his mother’s migration:

The guardian who received my mother at the boat was Sendor [sic] Jarmulowsky . . . . His name stands high in the memory of our family. As far as we were concerned, he was the Hachnosas Orchim [spirit of hospitality] incarnate. He was known to thousands of Jewish families. He . . . remains in the memory of thousands of Jews as the man who freed them on the soil of the United States. I have met Jews from Pittsburgh, from Chicago, from Boston and other places, all of whom remember his name with warmth. He considered 34 Feys, “A Business Ap- it his duty to receive personally the immigrants on arrival at proach”; GAR, HAL, Castle Garden. He provided them with a night’s lodging, a 318.04, Passage Depart- ment, 221-226, Letter good meal, and then dispatched them to their new homes, July 23, 1901.

KOBRIN | JEWISH IMMIGRANT “BANKERS” 77 personally accompanying them to the railroad station to say goodbye.35

From Ticket Broker to Trusted Banker Trading on piety was common among Jewish immigrant entrepreneurs. So when the North Atlantic Passenger Treaty signed by all the thirty shipping lines active in the North Atlantic made selling tickets no longer proﬁ table in 1895, Jarmulowsky and Kobre shift ed to operating “banks” to earn a proﬁ t. Jarmulowsky centered his business on the Lower East Side and Hamburg, while Max Kobre set up branches on the Lower East Side and in Brooklyn and expanded his Hamburg offi ce by opening a branch offi ce in Rotterdam.36

Jarmulowsky and Kobre’s businesses shared several common features with many other immigrant banks. As historian Jared Day points out, immigrant bankers relied heavily on the loyalty of working-class immigrants as customers whom larger banks — which employed only English-speaking tellers — rarely tried to serve.37 They also provided “a wide range of ancillary services very speciﬁ c to the immigrant community,” most notably, easy liquidation of accounts, the sale of ship tickets on installment, the off ering of credit and loans with no

35 Louis Lipsky, Memoirs in collateral, and the processing of small money transfers overseas. To Profi le (Philadelphia, 1975), be sure, Jarmulowsky and Kobre charged borrowers 6 percent inter- 12-13. est on loans, but they were seen as providing a much-needed service 36 Kobre’s main branches were in for their “unbanked” immigrant customers who could not get loans Williamsburg and Browns- ville. Alfred Kazin observed from chartered banks.38 Brownsville was a place “that all measured all success by [one’s] skill in getting away In short, Max Kobre and Sender Jarmulowsky’s ultimate successes from it.” Alfred Kazin, A Walker were not related to any revolutionary or unique service they off ered, in the City (New York, 1951), 12. but rather that they acted like thousands of other immigrant bank- 37 Day, “Credit, Capital and ers who off ered fi nancial services and other services — such as letter Community,” 67. writing and document translation from German and Russian — 38 In the matter of Max Kobre and that mainstream American banks refused to provide. Mainstream Moses Ginsberg, co-partners doing business as Max Kobre’s American banks may have been a safer choice, as they were chartered, Bank at 1783 Pitkin Ave, regulated, and constantly supervised by the state banking authority, Brooklyn, NY, November 13- 18, 1914, Folder 5263 NARA, but they made foreign depositors feel “unwelcome,” rarely employ- p.449d. It appears to be ing “translators” and allowing their “staff [to] treat immigrants with arbitrary, though all were 39 charged 6 percent interest. impatience.” Jarmulowsky for example, “fi xed his bank hours to suit the convenience of his patrons” — with Sunday being his longest day 39 Day, “Credit, Capital and Community,” 70. of business, when every other bank in New York was closed. All these services were provided in Yiddish to insure little confusion occurred.40 40 Reports of the Immigration Commission, 214-18. By providing all these services and employing only Yiddish, Eastern

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European Jewish immigrant bankers became the key middlemen between ﬁ rst-generation immigrants and the ever-evolving American banking system.

The Jarmulowsky family was able to amass a great fortune by the end of the nineteenth century by acting as such middlemen. Sender Jarmulowsky did not off er interest on deposit accounts but placed his bank’s reserve funds in mainstream banks in that off ered 4 percent interest. Moreover, he charged a 5-percent commission on all overseas money transfers. He charged 6 to 7 percent interest on loans he off ered to men he considered “pious” and “honest.” Since no one else would off er them credit, many took out loans from Sender Jarmulowsky’s bank to build businesses or invest in real estate.41

All told, America had been good to Sender Jarmulowsky, the orphan from Lomza, and he became committed to constructing for the Lower

East Side an edifi ce to mark his achievement. Hiring the esteemed 41 Numerous cases lodged architectural fi rm of Rouse & Goldstone, who had just completed the in New York City Civil Court shed light on these resplendent Langdon Hotel, the Jarmulowskys contracted in 1912 to business practices. See erect a twelve-story loft building on the same corner of Canal Street Jarmulowsky v. Meyer Greenberg, August 20, Sender Jarmulowsky had established himself on thirty years earlier. 1893 [LJ-1893-422]; Hoping this building would bring “uptown elegance and class to Sender Jarmulowsky v. David Block, January 23, the Lower East Side,” the Jarmulowskys purchased only the fi nest 1893 [L.J. 1893 — B 287]; materials, with the lower section of the building composed of rusti- Sender Jarmulowsky v. Charles Bloom, November cated limestone. The bank stood apart from surrounding buildings, 6, 1893 [PL -1893-J 16]; by its sheer size and its giant, circular roofed tempietto that rose fi ft y Sender Jarmulowsky v. David Block November 9, feet above the building to a dome, appearing as an altar from which 1893 [LJ 1893 — D 315]; all could worship capitalism. Inside, there was a place to worship Sender Jarmulowsky v. Morris Kahn et al., May as well, under the trading fl oor, as Jarmulowsky did not want to 31, 1895 — [JL 1895 428]; Abraham L have to venture far for learning and prayer in his bank. The bank’s Lowenthal v. Sender façade and marble interior were thoroughly discussed on the pages Jarmulowsky, November 15, 1901 [JL 1901 398]; of the New York Architectural Digest. Great excitement and a parade Meyer Jarmulowsky and accompanied its grand opening on May 6, 1912. Advertisements in Louis Jarmulowsky (M.L. Jarmulowsky) v. Jennie the Yiddish press noted how this bank and its dedication would be Kind, et al., March 11, remembered forever, as it would change the course of Jewish life 1908 [PJ 1908 192]. 42 in America. 42 Forverts, May 4, 1912, p. 3. Sender Jarmulowsky did not live to see his temple to capitalism 43 “Sender Yarmulowski,” transform America, as he died less than a month later on June 2, 1912. Froverts, June 2, 1912; As a revered philanthropist and celebrity of the Lower East Side, his “Reb Sender Yarmulowski,” Tageblat, June 2, 1912; 43 obituary made the front page of all the major Yiddish newspapers. “Yarmulowski gebrakht Even the wealthier leaders of the Kehillah, or Jewish community, tsu kvure mit groys koved,” Morgn zhurnal, convened an emergency meeting of the executive board “to discuss June 4, 1912.

KOBRIN | JEWISH IMMIGRANT “BANKERS” 79 the great loss to the Jews of New York” and how they could continue his “work for the unity of Jews” from all areas of New York.44 Leav- 44 “Yarmulowski in eybige ruh,” Tageblat, June 3, 1912. ing his bank to his sons Meyer and Louis Jarmulowsky, many were shocked that this supposed multi-millionaire left an estate worth 45 “Only $501,053 Left By 45 Jarmulowsky: East Side Banker only approximately half a million dollars. Many wondered where Had Been Reputed to be Sender Jarmulowsky’s fortune had gone. The answer lay in the New Multi-Millionaire,” New York Times, August 14, 1912. York City real estate market and the speculative real estate dabbling of his son Meyer. 46 See Boss v. Jarmulowsky, R. W. S, “Landlord’s Tort Liability to Tenant for Injuries Jewish Immigrant Banks and New York City Real Estate Caused by Negligence of Inde- pendent Contractor,” Universi- In the years leading up to 1914, the world of immigrant banking ty of Pennsylvania Law Review and its credit-accessing strategies transformed the ever-expanding and American Law Register 87, no. 6 (April 1939): 731. world of New York real estate.46 Starting at the end of the nineteenth

47 For a discussion of Jews in century, real estate emerged as the ideal industry for ambitious im- New York real estate, see migrants who lacked capital and were willing to take risks. Scholars Clarence I. Freed, “Romance of Realty: Men Who Have Become have long pondered Jewish immigrants’ embrace of real estate invest- Masters of the Metropolis ment, which took place in numerous cities throughout the world in through Real Estate Enter- 47 prise,” American Hebrew 120 this period. Unlike other commodities in which Jews invested dur- (April 1927): 742-43; Andrew ing this period, real estate did not present its investor with an easily Dolkart, “From Rag Trade to 48 Riches: Abraham E. Lefcourt portable asset. Rather, it exemplifi ed an entrepreneurial spirit: it Builds the Garment District,” promised great profi ts to those willing to take large risks and live in Chosen Capital: The Jewish Encounter with American Ca- with much uncertainty. pitalism, ed. Rebecca Kobrin (New Brunswick and London, The Jarmulowsky family clearly illustrates the ways Eastern Euro- 2012), 62-92; Deborah Dash Moore, At Home in America: pean Jewish immigrant entrepreneurs became involved in real estate Second Generation New York investment. Beginning in the 1890s, one fi nds several court cases in Jews (New York, 1981), 19-60. For a discussion of Chicago, which Sender Jarmulowsky sued an individual who defaulted on a see Beryl Satter, Family Pro- loan payment for the mortgage of a certain property. Jarmulowsky perties: Race, Real Estate and the Exploitation of Black Urban appears to have regularly made loans to aspiring Eastern European America (New York, 2009). Jewish immigrant real estate developers. Some succeeded but others 48 Discussions of Jewish entre- failed, and Jarmulowsky then found himself the owner of over twelve preneurial niches including portable assets can be found buildings on the Lower East Side as a result of their defaulted loans. in Sarah A. Stein, Plumes: The elder Jarmulowsky was well placed to succeed in what was then Ostrich Feathers, Jews, and a Lost World of Global Commerce a new arena for wealth acquisition. (New Haven, 2008); Alicia Oltuski, Precious Objects: A As the New York Times reported in 1903, Story of Diamonds, Family, and a Way of Life (New York, 2011); Veerle van den Daelen, [A] new industry or a new method of investment for per- “Negotiating the Return of the Diamond Sector and Its Jews: sons of small capital has arisen and has attracted the atten- The Belgian Government Dur- tion and the energies of many who had been engaged in ing the Second World War and in the Immediate Post-war other lines of activity. Speculative tenement building, to Period,” Holocaust Studies 18, give it a name that best seems to describe it, has become a nos. 2-3 (Autumn–Winter 2012): 231–60. recognized business in part of the city . . . and has given

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occupation to scores of men who have saved a few thousand dollars by laborious work in the sweatshops of that district.49

In a manner reminiscent of how Jarmulowsky had leveraged and speculated on ship tickets in Germany, he also bet on real estate. Jews were far from the only immigrant group to invest in real estate. Such behavior was common, as the Dillingham Senate Immigration Commission noted: “there is a great tendency about immigrant bankers to invest funds entrusted to them in real estate and stocks . . . speculation in real estate is not infrequent. The tying up of funds in this way caused many failures during the panic of 1907.”50 Another investigator for the New York State Tenement House Commission, 49 “Many Big Tenement Elgin Gould, explained the allure of such investments: Houses Built with Little Capital,” New York Times, September 13, 1903, 30. The work is done as cheaply as possible as it is all done on credit . . . . Every penny saved means so much more profi t 50 United States Senate, Re- ports of the Immigration to the building as he is not a holder for investment but Commission: Immigrant builds to sell as soon as the building is completed or even Banks, 61st Congress, 3rd Session, vol. 37, Senate before completion, should he be fortunate enough. Such a Doc. 753 (1911) [here- tenement built on an inside lot, would cost at the present aft er: Reports of the Im- migration Commission], time from $16,000 to $19,000. The cost of the lot varies, p. 244. let us say, from $15,000 to $18,000. The total investment 51 Elgin R.L. Gould, “Finan- would therefore amount to about $34,000. Rentals are cial Aspects of Recent fi xed so that if the building keeps full and all rents are col- Tenement House Opera- tions in New York,” in The lected, from 12 to 12.5 percent gross would be received.51 Tenement House Problem, vol. 1, ed. Robert DeFrost and Lawrence Veiller (New Though not the only ones to engage in this venture, Jewish immi- York and London, 1903), grant bankers became particularly heavily involved in real estate at 355-66, here 358. the turn-of-the century because they emerged as the main source 52 Richard Wheatley claimed that Jews in New York of loans to ambitious immigrants. Many contemporary observers not only owned close to have noted this fact, but few scholars have yet to address it.52 Jewish $200,000,000 in real estate but their constant entrepreneurs’ appreciation of real estate as a commodity may have trade of real estate hold- been directly linked to their premigration experiences: since Jews ings was responsible for more “than fi ve-eighths” were “forbidden to own land,” they “never developed an attitude of of all real estate deals reverence and permanence toward land.”53 Jews may have diff ered in New York City. See Wheatley, “The Jews in from other immigrant groups in their lack of sentimentality towards New York,” 325. Also see land but they clearly diverged in their forward-looking attitude: Abraham Shachter, “Jews as the Builders of New when other groups began moving into specifi c neighborhoods, they York,” American Hebrew, moved elsewhere and developed new communities. Rather than July 4, 1912, 10. limiting their involvement to Manhattan, Eastern European Jewish 53 Edward Shapiro, A Time immigrants specialized in developing the outer boroughs of New York for Healing: American Je- wry Since 1945 (Baltimore, City. As George Cohen noted in 1924, 1992), 121.

KOBRIN | JEWISH IMMIGRANT “BANKERS” 81 The purchase of real estate and the building of new houses has become a Jewish business in New York, and in the other large cities where Jews are represented in appreciable numbers. Whole stretches of hitherto uninhabited territory, like the Bronx, Borough Park and Bensonhurst in New York City, Douglas Park section in Chicago and similar sections in the other cities have been converted into veritable cities, where block aft er block of fi ne suburban residences house the Jewish population. Land values within ten years have risen to an extent undreamed of. Barren and deserted spots have been turned into fi ne residential sections with all the latest advantages of a modern community. The tenement sections into which they migrated several decades earlier have been to a certain extent rebuilt; numbers of old private houses and slum dwellings have been converted 54 George Cohen, The Jews in the into up-to-date double decker apartments. Making of America (Boston, 1924), 127-28. Perusals of the real estate columns of the daily newspapers 55 Donna Gabaccia, “Little Italy’s bring out the fact that the overwhelming majority of buyers Decline: Immigrant Renters and Investors in a Changing of real estate are Russian Jews. The vast heterogeneous City,” in The Landscape of Mo- population of New York City is sheltered in Jewish homes. dernity: Essays on New York City, 1900–1940, ed. David The Real Estate Record and Guide might be mistaken for a Ward and Oliver Zunz (New Jewish directory of the city.54 York, 1992). Indeed, scholarship on the role of Jews in New York real estate devel- Jewish immigrant entrepreneurs of all groups relied on their ethnic opment has focused mostly networks to build the types of dwellings that would entice other on the interwar years when the outer boroughs became Jewish immigrants to move.55 But the system that built up the tene- speckled with small apartments and new neighborhoods was heavily dependent on credit ment buildings erected by Jewish entrepreneurs in the access and risk. Eastern European Jewish immigrant bankers’ easy Bronx along the Grand Con- course or in Brooklyn, along off ers of credit helped immigrant Jews become a central force in Eastern Parkway. These Jew- the expansion of new areas of New York City. Eastern European ish builders relied on their ethnic networks to build the Jewish entrepreneurship was critical in reshaping northern types of dwellings that would Manhattan, in particular the Harlem neighborhood, which has been entice middle class Jews. 56 See Deborah Dash Moore, At called Manhattan’s fi rst suburb. Home in America (New York, 1983), 19-59. Harlem, long viewed as a bucolic retreat from the hectic life of the

56 Gilbert Osofsky, Harlem: The burgeoning metropolis, had remained relatively untouched for cen- Making of a Ghetto (Chicago, turies. The phenomenal growth of Harlem in the late nineteenth 1996, reprint), 71; Jeff rey Gurock, When Harlem Was century was a byproduct of the development of New York City, whose Jewish (New York, 1979). population soared to over a million people in 1880, with the elevated 57 57 Osofsky, Harlem, 74; Walter train expanding to its northern reaches. Anticipating immigrant Laidlaw, Population of the City Jews’ inﬂ ux into Harlem to escape the cramped and impoverished of New York, 1890-1930 (New York, 1932), 51. conditions of the Lower East Side, Jewish investors started buying up

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Harlem’s ready supply of cheap lots. Indeed, this purchasing spree prompted lot values to skyrocket literally overnight, but Harlem was seen as both a new residential haven for Jews and a place that promised quick riches. So many Jewish entrepreneurs tried their luck in Harlem’s real estate market that Abraham Cahan, editor of the Jewish Daily Forward, the most popular Yiddish daily newspaper, coined the Yiddish term “realestatenik” (combining the words real estate and alrightnik [nouveau riche]) to refer to the growing ranks of real estate speculators in the Jewish immigrant world. 58 Abraham Cahan, The Rise of David Levinsky As Cahan evocatively depicted in his classic tale of Jewish immigrant (New York, 1917, reprint, life, The Rise of David Levinsky, “huge fortunes seemed to be growing 1969), 480. like mushrooms all over New York . . . . I saw men who three years 59 Ibid., 464. ago had not been worth a cent and who were now buying and selling 60 Ibid., 486. blocks of property.”58 The “intoxicating” real estate “boom,” Cahan 61 George Cohen, The Jews explained, attracted all “the small tradesmen of the slums” to “invest in the Making of America their savings in houses in lots.”59 These “realestateniks” would gather (Boston, 1924), 127-28. th in Harlem on the corner of Fift h Avenue and 116 Street, where their 62 On Jarmulowsky’s hold- “gesticulating, jabbering, [and] whispering” made them resemble ing, see the records of the Real Estate Board of New 60 “the crowd of curb-brokers on Broad Street.” Echoing Cahan’s York. fi ctive portrayal of the role Eastern European immigrant Jews were 63 New York Age, Dec. 26, playing in New York City’s real estate boom, George Cohen noted that 1912. This whole encoun- tenement construction had emerged in New York as a particularly ter is discussed by Steven Bloom in his dissertation, 61 Jewish economic niche. “Interactions Between Blacks and Jews in New Meyer Jarmulowsky, scion of one of the most infl uential Eastern York City, 1900-1930, as Refl ected in the Black European Jewish immigrant banking families, was one of the most Press”(Ph. D., New York successful “realestateniks” around. Before the suit that revealed the University, 1973), 167-71. extent of their holdings, Meyer had his father’s permission to use bank 64 “Be a Factor in the Busi- ness World: Advice of assets to build up a real estate empire. By 1912, he not only owned over Meyer Jarmulowsky, East twenty properties in central Harlem; he also became a prominent leader Side Banker, to Negroes,” Amsterdam News, Decem- in the “redlining” movement to limit African-American settlement to ber 26, 1912. The intri- a district north of 135th Street to the Harlem River in order maintain cate ways Meyer Jarmu- lowsky acknowledged and 62 property values. In 1912, he spoke at St. Philip’s Church, Harlem’s played upon issues of race premier African-American church, on “The Housing Problem from the demonstrates some of the ways immigrant Jews 63 Owners’ Point of View.” There, he made the dubious argument that saw themselves “acquiring the eff ort to restrict African-American residences in Harlem stemmed the prejudices associated” with America as they not from racial prejudice but from the fact that African Americans did “scrambled for social sta- little to avert the deterioration of property. Comparing Harlem in 1912 tus” in the race-conscious nation. See Eric Goldstein, to the Lower East Side in the 1870s, he urged his African-American The Price of Whiteness: audience to buy property and learn from his family’s success and to Jews, Race and American Identity (Princeton, 2006), “Be a factor in the business world.”64 82.

KOBRIN | JEWISH IMMIGRANT “BANKERS” 83 Only aft er the elder Jarmulowsky’s death would the extent of Meyer’s investments in Harlem become clear. During his life, Sender Jarmulowsky had amassed a huge fortune, which he had donated generously within the Jewish community and ﬂ aunted freely. He even commissioned the building of an ostentatious bank on the very corner of Canal Street where he had established himself thirty years earlier. And yet, when he died, in June 1912, this supposed multi-millionaire left an estate worth only approximately half a million dollars to his wife.65 Where had the money gone? It was swallowed up by Meyer’s real estate investment strategy to expand the Jarmulowsky bank’s proﬁ ts. Aft er hearing rumors concerning the construction of a new subway line along Second Avenue, Jarmulowsky purchased thirty- seven properties with bank assets in East Harlem, believing they would make him even more money than his previous investments had.66 But his loft y ambitions were thwarted by events that transpired in Europe.

On June 18, 1917, Judge Augustus Hand presided over the bankruptcy hearing for Sender Jarmulowsky’s bank. Seizing all buildings owned by the Jarmulowsky family, Hand set up a receivership, which he called the Loretta Corporation.67 All anxiously awaited for the auction of the Jarmulowsky properties, estimated to be worth $2 million in 1918. While the auction room was ﬁ lled with many bidders and some 65 “Only $501,053 Left by Jarmulowsky: East Side former depositors of the bank, the great interest did not turn into Banker Had Been Reputed to $ be Multi-Millionaire,” New great proﬁ ts; in the end only 371,850 was realized from the sales. York Times, August 14, 1912. Watching the claimants who held the government responsible, even

66 “FIRST AVENUE FOR SUB- though the Jarmulowsky bank was not chartered or checked by the WAY; Reasons Why East Side New York State Banking Authority, Hand joined forces with the State Line Should Be There,” New York Times, November 19, Banking Superintendent to craft increased regulation of private banks 1904; “FOR FIRST AVENUE along with new legislation to protect depositors and the state from SUBWAY; East Side Improve- ment Association Treasurer corrupt immigrant entrepreneurs who called themselves “bankers.” Argues for It,” New York The eff ort to transform these proposed regulations into law illus- Times, February 2, 1905. Indeed, rumors of the con- trates how these immigrant entrepreneurs — far from just operating struction of this subway line on the periphery of the economy and transforming the immigrant are still being debated. Michael Grynbaum, “Further economy — were also able to set changes in motion that altered the Delays Possible for Second shape of American banking at its core. Avenue Subway,” New York Times, July 22, 2009. Immigrant Bank Closures and the Expansion of New York State 67 See the following cases: JARMULOWSKY C.A.2 1919, Banking Law Circuit Court of Appeals, Second Circuit, May 14, 1919; The years immediately following the closures of the Jewish immigrant no. 161. Robbing v. Bank of banks marked a watershed moment in the history of commercial M. & L. Jarmulowsky, 90 N. Y. Supp. 288. banking in New York City. To be sure, long before 1914, as historian

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Jared Day notes, “numerous immigrant bank failures” provoked the creation of new regulations. Failures in 1907 prodded “the New York state legislature to pass what came to be known as the ‘Wells Law’. This law provided that all private bankers who accepted money for the sale of steamship tickets or for transmission abroad had to ﬁ le a $15,000 bond to assure that the transactions were faithfully executed.”68 While the Wells Law addressed issues of corruption in the world of immigrant banking, the only crime committed by the Jewish immigrant bankers was their heavy investment in real estate that could not be liquidated quickly. In response, banking and legal authorities craft ed the Banking Law N.Y. § 156 in 1919, which gave “persons making deposits for safekeeping or transmittal preferred claims against certain funds upon a private banker’s insolvency,” and to recover any “money which he can trace and identify.”69 The law would enable depositors to make claims against Jarmulowsky’s massive real estate holdings. Banking Law N.Y. § 156 would go on to deﬁ ne banking insolvency law until 1930.

But the most revolutionary change set in motion by the immigrant bank closures of 1914 concerned the world of private banking, of which immigrant banks constituted the largest segment. “Until the passage of the present law, no private banker,” explained the New York State Banking law, “was subject to the supervision of the superintendent of banks.”70 Indeed, several court cases in the years leading up to 1914 had “recognized” the defi nition of a private banker as “a 68 Day, “Credit, Capital and person or a fi rm engaged in the banking business without authority Community,” 75-76; from the banking department and not subject to the banking law or David Warfi eld and 71 Margherita Arlina Hamm, the supervision of the superintendent of banks.” But as the New Ghetto Silhouettes (New York Times reported, just months before the war broke out, the Sen- York, 1902). ate Banking Committee held a hearing and decided that immigrant 69 This law can be accessed bankers must be supervised and regularly checked to avoid failure. and read in full through Westlaw, Document Calling for increased regulation of private banking fi rms, ironically, 14_39_33_4300. Meyer Jarmulowsky himself admitted that “the security of the de- 70 George Wilson Morgan positors depends entirely on the honesty, conservatism and busi- and Amsa Parker Jr., Ban- ness wisdom of the banker.”72 Under questioning, he admitted that king Law of New York: Chapter 2 of Consolidated real estate investments of private bankers should be more closely Laws, Chapter 369, Laws of supervised. Thus, in response to his own advice, New York State 1914 with Notes, Annota- tions and References (New revised its banking laws, declaring in Chapter 369 of Section 2 of the York, 1919), 5. Consolidated Banking Laws of New York that anyone who wanted to 71 Ibid., 5-6. call himself a “private banker,” or who “makes use of any offi ce sign bearing thereon the word “bank” in his business must be regularly 72 “All Do Not Favor State Regulation,” New York supervised by the New York State’s Banking Superintendent.” No Times, January 17, 1914,.

KOBRIN | JEWISH IMMIGRANT “BANKERS” 85 entrepreneur can just claim to be “a banker” without a state charter. The State Banking Superintendent would monitor all immigrant banks to insure they kept enough assets in reserve and did not loan funds to risky borrowers. The entrepreneurial practices of Eastern 73 I would like to thank Shira European Jewish immigrant bankers paved the way for the expansion Poliak for all her research assistance with these fi gures of the state power into immigrants’ fi nancial lives and the limitation and charts. Annual Report of the Superintendent of Banks, of places where they could gain access to credit. 1924, 7; Annual Report of the Superintendent of Banks, 1927, The Annual Reports of the Superintendent of Banks from the 1920s 7; Annual Report of the Super- intendent of Banks, 1922, 6. illustrate how the state policy of advising immigrant entrepreneurs to incorporate their enterprises as state banks altered banking in New 74 Annual Report of the Superin- 73 tendent of Banks, 1927, 7. York City. “The department “advised private bankers to incorporate because of the additional protection aff orded the depositors,” the 75 A 0 indicates that the report specifi ed that no new private 1927 Annual Report of the Superintendent of Banks noted, with the bank was authorized or liq- result that the number of private bankers declined from year to year.74 uidated. A space indicates that the Annual Report did At least 36 private banks incorporated as state banks or became a part not specify if new banks were of ordinary fi nancial institutions between 1915 and 1932 (see Table 1). created, liquidated, or became incorporated banks in Meanwhile, between 1914 and 1932, the department liquidated ap- the given year. I would like to proximately 101 private banks — the same number of private banks thank Shira Poliak for creating this table. that were under the supervision of the Superintendent of Banks at

Table 1: Number of Private Banks Authorized, Liquidated, and Incorporated as State Banks, 1915-193275 (Source: Annual Reports of the Superintendent of Banks, 1914-1932)

Number of New Number of Number of Private Banks Number of Private Banks Private Banks Incorporated or Absorbed by Year Private Banks Authorized Liquidated Incorporated Institutions 1915 75 29 3 1 1916 76 11 5 1 1917 80 9 4 1 1918 84 1919 91 10 2 1920 101 10 1921 98 3 4 1922 95 3 5 1923 90 0 6 1924 82 1 5 1925 74 0 0 4 1926 68 0 4 8 1927 59 0 7 2 1928 50 0 6 1929 44 0 7 17 1930 33 0 18 1931 20 0 21 1932 17 0 6 Total 101 36

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its peak in 1920. Many of these liquidations were involuntary, which highlights how the Banking Department expanded state authority to clamp down on immigrant banks they deemed to be ﬁ nancially unsound.

The Banking Department’s eff orts to liquidate immigrant banks transformed the strategies that immigrant entrepreneurs who remained in the world of unregulated fi nancial services for the immigrant working class used. Real estate development and investment became markedly less popular as the annual report of the New York State’s Superintendent of Banks suggests: the percentage of real estate and mortgages these banks held, as Table 2 illustrates, dropped signifi cantly. In 1915, real estate and mortgages comprised 36 percent of the total assets of these banks, and this fi gure dropped to as low as 7 percent by 1923. This change is signifi cant because it suggests that the Banking Department’s eff orts to pressure private banks led Eastern European Jewish immigrant bankers to restructure and become safer — moving away from risky, illiquid and highly speculative 76 Memorandum from Joseph assets like real estate which had alarmed the Superintendent of Banks Broderick to Mr. Samuel Rosenman, Counsel to the in his initial review of their books in 1914. Governor, n. d., Legislative Bill Jacket 1930, chap. 678, Aft er 1914, instead of seeing immigrant banks as off ering credit Reel #5, New York Public Library — Science, Indus- and services to “unbanked” immigrant workers, banking regulators try and Business Library, became convinced that these informal fi nancial institutions were New York, NY. I would like to thank Shira Poliak for suspect and fraudulent. They mobilized public pressure and lobbied pointing me to this source. for new banking laws to suppress immigrant banks’ capacities. As the New York State Super- Table 2: Percentage of Real Estate and Mortgages of Total Assets of Private Banks under the Supervision of the intendent of Banks Joseph Superintendent of Banks, 1915-1926 (Source: Annual Broderick declared in support Reports of the Superintendent of Banks, 1915-1927) of amendments to New York Percent of Real Estate and Mortgages of State banking laws in 1930, “The Year Total Assets amendment will not only act as a 1915 36 deterrent to the formation of new 1916 30 bootleg banking concerns, but 1917 20 will serve either to drive those in 1918 15 existence under the supervision 1919 11 of the Banking Department or 1920 10 76 1921 9 out of business.” Drawing on 1922 8 Prohibition-era discourse, Brod- 1923 7 erick made clear that unregu- 1924 8 lated immigrant bankers were 1925 8 1926 7 akin to renegade bootleggers.

KOBRIN | JEWISH IMMIGRANT “BANKERS” 87 By 1930, Broderick had made credit access for immigrants as diffi cult to fi nd as an alcoholic drink. He made it illegal for private banks holding deposits under $500 to accept any sums, thereby preventing those surviving immigrant banks from providing the basic service it clients needed.77 The eff orts of the Banking Depart- ment signifi cantly curtailed private banks’ capacities, so by 1932, only seventeen immigrant banks remained under the Superintendent of Banks’ supervision — a huge drop from the over one thousand immigrant banks the Dillingham commission found in 1909.78

Conclusion In the decades following 1914, immigrant banking would be virtually erased from the streets of New York City. While the ediﬁ ces constructed by various luminaries of the world of immigrant banking still stand on New York’s Lower East Side, their owners’ names and their entrepreneurship have faded into oblivion as a result of increased regulation craft ed by the New York State Banking Authorities. As the banking capital of the nation, New York, with its legislation and action, served as a model for other states for addressing the problem of “immigrant banking,” a “problem” that would be eliminated from the United States in the coming years.

So what historical lessons can be learned from paying closer attention to the lost world of Jewish immigrant entrepreneurs who sold ship tickets and set up enterprises called banks? First and foremost, Jewish immigrant bankers were far from exceptional: dozens of other immigrants inserted themselves in the American economy by conducting businesses that depended on connections on both sides of the Atlantic. Utilizing their native tongue, these entrepreneurs took advantage of the new markets that opened up as a result of migration. Far from exceptional, Eastern European Jewish immigrants — to use the words of Claude Lévi-Strauss — I argue are “good to think with” about this larger network of immigrant entrepreneurs as their clients oft en brought them to court, laying bare many of their business practices.79 By off ering credit to prospective migrants in Germany and engaging in other business 77 Van Horn, “The Small practices, these entrepreneurs both fueled and shaped this mass Private Banker in New York and Regulatory Change,” 116. population shift . Indeed, as many oft en forget, the world of immigrant banking made mass migration to America possible. Once 78 Annual Report of the Superin- tendent of Banks, 1932. their migrant clientele arrived in America, continued access to credit transformed not only immigrant economic adaptation to America 79 Claude Lévi-Strauss, Tote- mism (Boston, 1963), 89. but also the physical landscape of New York City.

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The virtual erasure of immigrant bankers from the annals of American economic history has ultimately obscured the crucial role immigrant entrepreneurs played in the development of American commercial banking. While many scholars refl ect upon the critical link between entrepreneurship and growth in opening up new markets, fewer refl ect on the role entrepreneurship plays in creating new types of regulations and legal structures that shape the world in which all entrepreneurs can even operate. Immigrant bankers not only provided a vehicle through which unbanked immigrant masses could participate in American fi nance; they prompted new types of regulations that forever changed the face of commercial banking in the United States. Far from operating on the periphery of the world of banking, these Eastern European Jewish immigrant entrepreneurs transformed American banking at its core as their unchartered banks provided new models for how the foreign-born could access credit in New York.

In the end, a closer examination of Eastern European Jewish immigrant entrepreneurship contributes not only to the growing literature on the economic dimensions of immigration history but also to the larger discussion on the interrelationship between American character, immigrants, and capitalism. Perhaps discomfort with immigrant bankers was rooted in a larger general anxiety about the role speculation played in America’s rapid advance as a world economic power.80 While America’s founding myth identifi es American affl uence as rooted in celebrated Protestant values of hard work, saving, and methodical planning, those closer to the world of immigrant banking faced the limitations of thrift and circumspection for those trying to get a footing in the new world. Speculation — in real estate, ship ticket sales, or banking — was the engine that drove America’s economic expansion in fi rst decades of the twentieth century. There were those who worried, however, that the speculative ethos that these men exemplifi ed undermined the “frontier spirit” that had molded America’s geographic expansion and character in the previous generation. As the lost world of Jewish immigrant banking illustrates, much economic development was precipitated by the innovative approaches and entrepreneurial spirit of fearless immigrants on the frontiers of credit in their new world. Indeed, in 80 Jackson Lears, Something revisiting this lost world we gain “a richer and deeper understand- for Nothing: Luck in America (New York, 2003), 5. ing of entrepreneurship and how it shapes and reshapes the modern world” both through opening up new markets and through creating 81 Wadhwani and Jones, “Schumpeter’s Plea: new regulatory structures.81 Historical Reasoning,” 216.

KOBRIN | JEWISH IMMIGRANT “BANKERS” 89 Rebecca Kobrin is an associate professor of American Jewish History at Colum- bia University and the author of several books, including Jewish Bialystok and Its Diaspora. She served as the Hilda Blaustein Post-Doctoral Fellow at Yale University (2002-2004) and the American Academy of Jewish Research Post-Doctoral Fellow at New York University (2004-2006). Her areas of specialty include American Jew- ish history, immigration history, international history, and Jewish economic history. Her research, teaching, and publications engage in the ﬁ elds of international history, urban history, Jewish history, American religion, and diaspora studies.

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The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

JOHANN CHRISTOPH SAUER: PIONEER OF THE GERMAN-AMERICAN PRESS

Hans Leaman

Johann Christoph Sauer (born ca. February 2, 1695 in Ladenburg, Electoral Palatinate; died September 25, 1758 in Germantown, PA) was the most active publisher of German-language print in colonial America. Through his publishing work, based in Germantown, Pennsylvania, he became the mouthpiece for many German immigrants’ opinions on the political and religious controversies of the mid-eighteenth century. Contemporaries recognized that the path to winning the political support of German-speaking settlers in the mid-Atlantic colonies ran through his printing press, and Germans on both sides of the Atlantic looked to him as a prime conduit of information between Europe and America.

Sauer imported the fi rst set of German type to America, edited the most successful German-language newspaper and almanac in the colonies, and published the fi rst European-language Bible in America. The fi rst editions of many German-American churches’ hymnals and devotional books also bear his press’s imprint. Both his son and grandson, who bore his name, continued his major printing projects aft er his death and remained prominent voices for sectarian German-Americans during the French and Indian War and the American Revolution.

Family and Ethnic Background Sauer was born into a Reformed pastor’s family in the Electoral Pala- tine town of Ladenburg, situated along the Neckar River halfway between Heidelberg and Mannheim. His father, Johann Christian Sauer, and mother, Anna Christine, had him baptized in the parish church on February 2, 1695. He had at least one older brother, one older sister, and one older step-brother from his father’s ﬁ rst marriage. Sauer’s father had studied theology at Marburg and took up a post as pastor and schoolmaster in Ladenburg in 1681. Soon aft er Sauer was born, the family moved to Feudenheim, closer to Mannheim, where Johann Christian pastored until his death six years later in 1701. It is uncertain where Sauer spent the rest of his childhood, but by the age of 18 he was living in Schwarzenau, in the County of Wittgenstein, and working as a young tailor. The presence of a Sauer

LEAMANN | JOHANN CHRISTOPH SAUER 93 family in the records of two nearby towns, Laasphe and Berleburg,

1 Donald F. Durnbaugh, has led historians to posit that the widowed Anna Christine moved “Christopher Sauer, to Wittgenstein with her children soon aft er her husband’s death. Pennsylvania-German Printer: His Youth in Germany and Around 1720 Sauer married Marie Christine Gross (née Gruber), the Later Relationships with Eu- widow of a Reformed pastor, and the couple moved to Laasphe, where rope,” Pennsylvania Magazine of History and Biography 82 they welcomed the birth of their only child, Johann Christoph II, on (1958): 316-40, here 319-23. September 26, 1721.1 2 Ibid., 222-23; Hans Schneider, German Radical Pietism, trans. During the years that Sauer lived in Wittgenstein, it had become a Gerald T. MacDonald (Lanham, center of refuge for radical Pietists like Ernst Christoph Hochmann MD, 2007), 89-97, 107-12; Donald F. Durnbaugh, “Was von Hochenau (1670-1721) and Alexander Mack (1679-1735), who Christopher Sauer a Dunker?” Pennsylvania Magazine of Hi- founded the Schwarzenau Brethren in 1708. (Because of their prac- story and Biography 93 (1969): tice of adult immersion baptism, the Brethren became known as 383-91. “New Baptists” or “Dunkers,” and, in colonial America, as “German 3 Sauer to Brethren and Friends Baptists”.) Sauer had personal contacts with Mack in Schwarzenau, (Germantown, Dec. 1, 1724), handwritten copy, Nieder- and the absence of Sauer’s son from the baptism rolls of the lo- sächsische Staats-und Univer- cal parishes likely indicates that Sauer had become a separatist by sitäts-Bibliothek, Göttingen, Cod. Ms. Hist. 821, 10r-18v, 1721. There is no record that Sauer ever became a member of the here 15r, translation at R. W. Brethren, but his sympathies toward the group were apparent in his Kelsey, “An Early Descrip- tion of Pennsylvania. Letter of writings, and his son eventually became a bishop for the German Christopher Sower, written in Baptists in Pennsylvania.2 Sauer’s contacts within the networks of 1724, Describing Conditions in Philadelphia and Vicinity, German Pietists and other sectarians proved integral to his later and the Sea Voyage from Eu- printing career. rope,” Pennsylvania Magazine of History and Biography 45 (1921): 243-54, here 249. In autumn 1724, Sauer left the German lands with his wife and son, arriving in Philadelphia on November 1. Writing to friends in Witt- 4 News from Sauer was oft en ﬁ rst published in Germany in genstein one month aft er his arrival, Sauer recounted the journey the radical Pietists’ religious journal Geistliche Fama, Mit- favorably and described Pennsylvania as a “very good and blessed theilend Einige Neuere Nachrich- land, like an earthly Paradise.”3 (“. . . so ist dieses Land für vielen einen ten von Göttlichen Erweckungen (Berleburg, 1730-1744). Sauer, andern Ländern ein sehr gutes und gesegnetes Land, und gleichsam ein in turn, frequently reprinted weltliches Paradies . . . .”) This would be the ﬁ rst of many dispatches material from Geistliche Fama in his early publications. from Sauer that gained a wide audience among the sectarians of his home region.4 One contemporary in Wittgenstein, the French 5 Daß Leben deß Herrn Charles Hector Marquis St. George de mystic Charles Hector Marquis St. George de Marsay, recorded in Marsay von ihm selber be- his diary in 1725 that at least one hundred persons from the area schrieben nebst dem Leben der mit ihm vermählten Fräulein had resolved to leave for Pennsylvania aft er learning from Sauer’s Clara Elisabeth von Callenberg, letters that “One could live there as a good Christian in solitude, Archiv der Evangelischen Kirche im Rheinland, Düsseldorf, as one pleased,” and that if “one wants to work a little, especially BM 4/1, 294, quoted in craft smen . . . then one could earn his livelihood with abundance.”5 Durnbaugh, “Christopher Sauer,” 324. On de Marsay Toward the end of his life, Sauer claimed that his letters from and his wife, see Schnei- Germantown, describing the “civil and religious liberty” that he der, German Radical Pietism, 95-97. found there, had been “printed and reprinted” in Germany and

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“provoked many a thousand people” to emigrate to the Pennsylvania colony.6

As for earning his own livelihood, Sauer set his tailoring craft largely aside once he was in Germantown and instead began making clocks and repairing pots and pans. He explained to friends in Wittgenstein 6 Sauer to Gov. Robert Hunter Morris (German- that tailoring in Pennsylvania required working in people’s homes town, Mar. 15, 1755), rather than in his own shop, necessitating too much travel from Cassell Collection, Juniata College, Huntington, PA, Germantown to ﬁ nd enough business. Marie Christine also combed MS 95, printed at Martin wool to provide the family with some supplemental income. Wages, Grove Brumbaugh, A His- tory of the German Baptist Sauer estimated, were two to four times higher in Germantown than Brethren in Europe and they were in the German lands, and a day laborer or artisan without America (Mount Morris, IL, 1899), 377, and Donald F. any debts could buy one hundred acres and a “soundly built” stone Durnbaugh, ed., The Bre- 7 thren in Colonial America house within two or three years. (Elgin, IL, 1967), 32.

For Sauer it took less than two years to buy his own property. In 1726, 7 Sauer to friends and acquaintances at Schwar- Sauer purchased a fi ft y-acre farm in Lancaster County, Pennsylvania, zenau, Berleburg, Laasphe another area where many sectarian German immigrants were settling. and Christianseck (Ger- mantown, Aug. 1, 1725), But a signifi cant family change led him to abandon farming and return Fürstliches Archiv zu to Germantown in 1731: Marie Christine left Sauer and their young son Sayn-Wittgenstein-Berle- burg, Bad Berleburg, K 36, to pursue a contemplative life alongside Conrad Beissel (1691-1768) in translation at Donald F. the woods of northeastern Lancaster County. Beissel, initially a leader Durbaugh, “Two Early Let- ters from Germantown,” of the German Baptists in Lancaster County, had split from the church Pennsylvania Magazine of aft er he began advocating celibacy and worship on the Sabbath. As History and Biography 84 (1960): 219-33, here 229, one of Beissel’s earliest followers, Marie helped him form the religious 230, 232; Durnbaugh, community of the Seventh-Day Baptist Brethren in nearby Ephrata and “Christopher Sauer,” 324. eventually became the assistant prioress of the “Sisterhood” there, 8 In 1739, Sauer wrote a taking on the name “Sister Marcella.” It was not unusual for married pamphlet to air his ob- jections to Beissel’s self- partners to join the Ephrata community and commit themselves to image. Ein abgenöthigter Bericht, Oder: Zum öff tern celibacy. But Sauer distrusted Beissel’s unique theology and accused begehrte Antwort. . . (Ger- him of displaying messianic tendencies and a “mercurial” spirit.8 Even mantown: Christoph Saur, 1739). See also Jeff Bach, so, Sauer’s connections to the Ephrata community proved very ben- Voices of the Turtledoves: efi cial: when he took up printing, the Seventh-Day Baptist Brethren The Sacred World of Ephra- ta (University Park, PA, provided him with his earliest contractual work, and aft er the Breth- 2002), 42, 85, 111. The ren developed their own print shop in the mid-1540s, he partnered controversy between Sauer and Beissel is well- with them on several projects. Marie Christine returned to her fam- documented in Julius ily in Germantown in November 1744 and died eight years later on Friedrich Sachse, The German Sectarians of Penn- 9 Dec. 14, 1752. sylvania: A Critical and Legendary History of the When Sauer gave up farming in Lancaster County, he continued Ephrata Cloister and the Dunkers (Philadelphia, to pursue clock-making and added a number of other trades. 1899-1900), 328-44. A letter from one acquaintance in Pennsylvania to another in 9 Brumbaugh, German Bap- Germany reported that Sauer had opened an apothecary shop, tist Brethren, 352-53.

LEAMANN | JOHANN CHRISTOPH SAUER 95 performed bloodlet- ting and surgeries,10 erected a lathe shop next to his home where he made spinning-wheels and cabinets, and built a glazier shop where he made frames and lead grooves. These ventures, along with the sale of his farm- land in Lancaster County, apparently earned him a comfortable income: by 1739, soon after he Figure 1: Contemporary began printing, he had built along the main road in Germantown a photograph of the Saal two-story stone house, which was described as “very spacious.” In (meetinghouse) and Sa- ron (communal residence the absence of his wife, he paid an elderly woman to keep house for the monastic sisters) at for him and his teenage son.11 the Seventh-Day Baptist Brethren’s Ephrata Clois- ter near Ephrata, Pennsyl- By his last decade, his reputation as “a conscientious and ingenious man” vania. The Saal is on the (“ein ehrlicher gewissenhaff ter schickter Mann”) was well-established on left -hand side of the image 12 and the Saron on the right- both sides of the Atlantic. As one of the leading journals of ecclesias- hand side. Used under Cre- tical history in Germany introduced him in 1751, “He went to America ative Commons. as a tailor, and has become printer, apothecary, surgeon, botanist,

10 An apothecary recipe book that maker of small and large clocks, cabinetmaker, bookbinder, editor of once belonged to Sauer is held newspapers . . . maker of lead and wire, paper-maker, and so forth.”13 at the Abraham H. Cassell Col- lection (Collection 1610), His- torical Society of Pennsylvania, Business Development Philadelphia, Ms. 22. Sauer’s desire to become a printer merged his mechanical know-how 11 Christoph Schütz to Heinrich with his religious interests. In the decade before he established his Ehrenfried Luther (Homburg vor der Höhe, Oct. 3, 1740), printing press in 1738, he had already become tied into a network of printed in Die Egenolff - religious book-dealing that spanned the Atlantic. In 1729 he wrote Luthersche Schrift giesserei in Frankfurt am Main und ihre to Christoph Schütz (1689-1750), the proliﬁ c hymn-writer for the geschä ft lichen Verbindungen mit den Vereinigten Staaten von Inspirationist community based in Homburg vor der Höhe (which Nordamerika (Frankfurt am became the forerunner to the Amana Church Society in America), to Main, 1926), 36-37 (quoting a letter from a fellow corre- ask if he might send some of his hymnals or other religious books spondent in Springﬁ eld Manor, Pennsylvania, Oct. 6, 1739), 12 Ibid., 36. historico-ecclesiastica 15 introduction preceded partial translation at Edward (Weimar, 1751): 210-26, the publication of a W. Hocker, The Sower Printing 13 “Copey eines merkwürdi- translation at Durnbaugh, letter that Sauer had House of Colonial Times (Nor- gen Schreiben des Herrn Brethren in Colonial sent to a Frankfurt book ristown, PA, 1948), 17-18. Sauers in America,” Acta America, 120. This dealer.

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for poor German immigrants who were not getting suffi cient exposure to spiritual literature. At the time, there was almost no German- language printing in America. Only the year before did the Philadel- phia printers Andrew Bradford (1686-1742) and Benjamin Franklin (1705/1706-1790) begin to publish the ﬁ rst German prints in Amer- ica, but between 1728 and 1738 they managed to put out fewer than a dozen German books and hymnals.14 Bradford also printed a Ger- man-language almanac between 1730 and 1732,15 and Benjamin Franklin put out a short-lived German newspaper in 1732.16 Both used Roman (antiqua) type, which most Germans were unaccustomed to reading. Schütz responded to Sauer’s petition by sending over eight hundred pounds of Bibles and other devotional works at his own expense, which Sauer then distributed to the poor for free or, for families with some means, for a nominal cost that went towards further charitable endeavors. As church organizations in the German lands received more petitions from the colonies for donated religious literature, Sauer became a regular middleman for distributing the books.17

At the same time, Sauer also set his sights on a more permanent solution to the shortage of German-language books in the colonies. He expressed to Schütz his desire to found a small press in German- town to address what he identiﬁ ed as the two great needs of German colonists: theological matter and home remedies for illnesses. If he could obtain a set of German type, he wrote, he envisioned printing an almanac that would include reading material on both topics.18

Sauer had no training in printing, a profession that men usually joined 15 Der Teutsche Pilgrim: Mit- bringende Einen Sitten- only aft er serving long years of apprenticeship. That this German cus- Calender. . . (Philadelphia, tom was no impediment to taking up the trade at will, however, was 1730-1732). one of the aspects of American life that Sauer most appreciated: in 16 Philadelphische Zeitung one of his ﬁ rst letters to the German lands, he listed ﬁ rst among the (Philadelphia: Benjamin Franklin, May 6-June 24, advantages of life in Pennsylvania the fact that “there are neither guilds 1732). nor burdens from the authorities.”19 To get his start as a printer, he 17 Schütz to Luther (Oct. 3, turned to his Pietist connections in the German lands, writing in 1735 1740), at Egenolff - to Gotthilf August Francke (1696-1769), whose father — the renowned Luthersche Schrift giesserei, 35; Robert E. Cazden, A Pietist theologian, Biblical scholar, and philanthropist, August Herman Social History of the Francke (1663-1727) — had run a printing press in Halle in order to German Book Trade in America to the Civil War I disseminate inexpensive Bibles. Sauer sought Francke’s help in pur- (Columbia, SC, 1984), 3-6. chasing and exporting a set of Gothic (Fraktur) type. Francke expressed 18 Ibid., 36.

14 Karl John Richard Arndt Language Printing in the Gerd-J. Bötte and 19 Sauer to Friends (Aug. & Reimer C. Eck, eds., The United States of America Werner Tannhof 1, 1725), at Durnbuagh, First Century of German I: 1728-1807, comp. by (Göttingen, 1989), 1-6. “Two Early Letters,” 228.

LEAMANN | JOHANN CHRISTOPH SAUER 97 20 Gottlieb August Francke to “doubt whether a printing press in the West Indies would be of any Friedrich Michael Ziegenhagen (1735) (referring to a letter from particular value” (“. . . so zweifl e ich auch, daß durch eine Drückerei in Sauer to Francke, dated June Westindien sonderlicher Nutzen geschaff t werden möchte”),20 but Sauer 15, 1735), printed in W.J. Mann und B.M. Schmucker, eds., found interest three years later from individuals in Frankfurt am Main, Nachrichten von den Vereinigten the other main center of German Pietist activity. With Christoph Schütz’s Deutschen Evangelisch Lutheri- schen Gemeinen in Nord-America, mediation, Sauer successfully petitioned Dr. Heinrich Ehrenfried Lu- absonderlich in Pensylvanien, ther (1700-1770), the owner of a Frankfurt type foundry, to ship fi ve 2 vols. (Allentown, PA, 1886- 1895), 1:58-59, also quoted in to six hundredweight of type in the autumn of 1738. Although Sauer Durnbaugh, “Christopher Sauer,” 325-26. On Francke discovered that some of it was defective, leading to some diffi culties in and Ziegenhagen’s desire to his fi rst publications, Luther sent replacements and, in 1740, a set of keep Pietist printing tightly con- 21 trolled from Halle, see Thomas antiqua type as well. Müller-Bahlke, “Communica- tion at Risk: The Beginnings of While Sauer needed to procure his type from Germany, he did not the Halle Correspondence with the Pennsylvania Lutherans,” in need to import a press. Instead, he put his cabinet and clock-making Hartmut Lehmann, Hermann skills to work to build his own. He also employed his knowledge Wellenreuther & Renate Wilson, eds., In Search of Peace of chemistry to mix his own lampblack for the press, which he and Prosperity: New German later marketed to the public as “Sauer’s Curious Pennsylvania Ink- Settlement in Eighteenth-Century 22 Europe and America (University Powder.” Maintaining a suffi cient supply of paper proved to be the Park, PA, 2000), 139-55. most troublesome piece of the printing process. Andrew Bradford’s

21 Durnbaugh, “Christopher family had a long-standing business relationship with the Ritten- Sauer,” 328; Egenolff -Luther- house paper mill, giving him ﬁ rst option to buy paper for his press.23 sche Schrift giesserei, 30. Benjamin Franklin, on the other hand, had a close relationship with 22 Sauer to Heinrich Ehrenfried Dutch immigrant entrepreneur William Dewees (ca. 1677-1745), the Luther (Germantown, Oct. 11, 1740), in Egenolff -Lu- only other local source of paper in 1738. In order to complete his thersche Schrift giesserei, 39; The Pennsylvania Town and ﬁ rst book, a large hymnal for the Seventh-Day Baptist Brethren called Countrymen’s Almanac 1755 the Zionitischer Weyrauchs-Hügel, oder: Myrrhen Berg, Sauer obtained (Germantown, 1754), 40. the paper from Franklin at wholesale. But the cost of the paper was so 23 Comp. Patrick Erben, “William high that the colonial diplomat Conrad Weiser (1696-1760), who had Rittenhouse,” in IE. joined the Ephrata community, had to travel to Philadelphia to make 24 In Franklin’s account book for the purchase on Sauer’s behalf. Franklin, who had printed Ephrata’s 1738, he made entries for two extensions of credit totaling earlier hymnals, was willing to extend credit to Weiser for the large more than £96 (approximate- purchase, but not to Sauer. The hymnal was printed, in part, with ly $12,500 in 2011 dollars) to Conrad Weiser for the purchase paper that Franklin imported from Genoa, and since Franklin himself of 178 reams of paper, including had to pay cash for the imported paper, he likely needed assurance 52 reams from Genoa. George Simpson Eddy, ed., Account that payment would follow more quickly than Sauer was able to pro- Books kept by Benjamin Fran- vide.24 By 1744, however, Franklin accepted Sauer’s credit, and Sauer klin, 2 vols. (New York, 1928), 1:52; cited in Paul A. W. Wal- took out smaller orders of paper from him each year before paying his lace, Conrad Weiser, 1696-1760: Friend to Colonist and Mohawk » (Elgin, IL, 1908), 60-61, Franklin’s paper trade. of the Library Company (Philadelphia, 1945), 103; see 78. My thanks to James N. Green has also alerted me of Philadelphia is an un- also Sachse, German Sectarians, Green, Librarian of the to a strong documentary cut, unfolded sheet from 319-320, 326-328; John Sam- Library Company of Phil- link between Weiser’s the hymnal bearing the uel Flory, Literary Activity of the adelphia, for directing paper purchase and the distinctive watermark of German Baptist Brethren in the me to Eddy’s Account Zionitischer Weyrauchs- Franklin’s Genoa paper Eighteenth Century » Books and for describing Hügel: within the holdings manufacturer.

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account in full in 1748.25 Like Franklin, Sauer frequently advertised for rags from his readers, which he gave to local mills to produce paper at a discount. To gain more control over his paper supply, Sauer’s son eventually built his own paper mill on the Schuylkill River.26

Through his choice of publications, Sauer wedded his religious convictions with astute identiﬁ cation of the kind of reading that many Pennsylvania German immigrants were seeking. In his correspondence with Dr. Luther, Sauer wrote of his press as a type of religious and humanitarian mission. He held strong opinions that his press should not be used to create mere diversions for the reading public, but rather provide texts that would be for the “glory of God and the physical or eternal good of my neighbors.” “Whatever does not meet these standards,” he claimed, “I will not print . . . I am happier when I can distribute something of value among the people for a small price, than if I had a large proﬁ t without a good conscience.”27

These standards appear to have guided both the content of his pub- 25 Eddy, Account Books, lications and his business model. His early printing projects were 2:113-14. almost entirely religious in character and predominantly oriented 26 Eddy, Account Books, 2:16- toward radical Pietism and Anabaptism. The ﬁ rst publication to roll 18; Hocker, Sower Printing off Sauer’s press was a German translation of a religious broadside House, 84. by Benjamina Padley (1658/1659-1687), a female Quaker prophet 27 Sauer to Luther (Oct. 11, from England. Establishing a pattern that can be traced for many of 1740), in Egenolff -Luther- sche Schrift giesserei, 39; his publications, the translation was reprinted one year later in the quoted in Durnbaugh, Rhineland, indicating that Sauer’s press served as an important link “Christopher Sauer,” 329. in the transmission of ideas between English and German Pietist 28 Sauer’s edition, however, groups on both sides of the Atlantic. 28 named the author as a male: Benjamin Padlin, Eine ernstliche Ermahnung, Sauer’s ﬁ rst two books soon followed — an “ABC Book” likely written an Junge und Alte: zu einer 29 angeheuchelten Prüfung ih- by the local Mennonite schoolteacher, Christopher Dock (1738), and res Hertzens und Zustandes the hymnal for the Ephrata community, including many of Conrad (Germantown, 1738).

Beissel’s original works (1738-39). Soon other German churches 29 [Ein ABC Buch bey allen came to Sauer to print their own collections of hymns. Sauer is thus Religionen ohne billigen Anstoß zu gebrauchen the publisher of the ﬁ rst American hymnal for the Mennonites and (Germantown: Christoph Amish (Ausbund, 1742), the Moravians (Hirten Lieder von Bethlehem, Sauer, 1738) (no known copies survive)], as 1742), the German Baptists (Das Kleine Davidische Psalterspiel der Kin- advertised in Der Hoch- der Zions, 1744), the German Reformed (Geistreiche Lieder, 1752), and Deutsch Americanische Calender 1739 (German- the Lutherans (Vollstaendiges Marburger Gesang-buch, 1757). His son town, 1738), 23; Arndt & also completed the publication of the Schwenkfelders’ ﬁ rst American Eck, German Language Printing, 6; Walter Kline- hymnal (Neu-Eingerichtetes Gesang-Buch, 1762). feldter, The ABC Books of the Pennsylvania Germans Additionally, Sauer supplied many of the doctrinal and devotional texts (Breinigsville, PA, 1973), 10-14; Cazden, German most valued by the German churches: for the Lutherans and Reformed, Book Trade I, 269.

LEAMANN | JOHANN CHRISTOPH SAUER 99 he published the ﬁ rst American editions of Lu- ther’s Small Catechism (1744) and the Heidel- berg Catechism (1748); for Pietists, he printed texts by theologians like Gerhard Tersteegen and John Wesley (1744, 1747, 1748); for Ana- baptists, he published the martyr Thomas von Imbroich’s Confessio (1751) and works by Georg Frell and Christian Hoburg (1748); and for all groups he reprinted German translations of classics like Thomas a Kempis’ Imitation of Christ (1742, 1749, 1750) and part of John Bunyan’s Pilgrim’s Progress (1755). 30

Sauer also quickly implemented his plans to publish an annual almanac, which he titled Der Hoch-Deutsch Americanische Calender. First published in the fall of 1738 for the upcoming year, it predictably included the aspects and phases of the moon and plan-

Figure 2: Frontispiece of ets, times of sunrise and sunset, general weather forecasts, practical Sauer’s Hoch-Deutsch- advice for using herbs as medicinal aids, dates for court sessions Americanischer Calender and market fairs in the mid-Atlantic colonies, historical anecdotes, for the year 1747. Courtesy of the Library Company of and, eventually, blank pages for each month where farmers could Philadelphia. keep their accounts. Beginning with twenty-four pages, the almanacs gradually grew in size until they featured forty-eight pages in 1750. The almanacs initially cost nine pence (approximately $5.25 in 30 See bibliography of Sauer’s 31 prints at Anna Kathryn Oller, 2011 dollars), but aft er 1748 Sauer also off ered a two-colored ver- “Christopher Saur, Colonial sion for one shilling each (approximately $6 in 2011 dollars).32 The Printer: A Study of the Pub- lications of the Press, 1738- almanacs received a loyal following among German-speaking 1758,” Ph.D. diss., University farmers throughout the American colonies, reaching far beyond of Michigan, 1963, 288-302. the Pennsylvania sectarian communities who made up the core 31 Colonial-era currency ﬁ gures market for his book publishing. By the time his son published the are, unless stated otherwise, in pounds Pennsylvania. Conversions to US Dollar values are based on the rele- » “Measuring Worth” 1.541 US Dollars per GB “Money in the American vant average monthly or annu- (http://www.measuring- Pound. Financial histori- Colonies,” in Robert al exchange rates between the worth.com/ukcompare), ans, however, continue to Whaples, ed., Economic pound Pennsylvania and Brit- using the “purchas- debate the comparative History Association ish pound Sterling provided in ing power” or “historic purchasing power of Encyclopedia, Oct. 18, John J. McCuster, Money and standard of living” value colonial currency in 2013, http://eh.net/ Exchange in Europe and derived from the pound light of standard of encyclopedia/money- America, 1600-1775: A Hand- Sterling’s “retail price living diff erences be- in-the-american-colonies book (Chapel Hill, 1978), index.”Conversions from tween the colonies and (accessed Dec. 12, 183-86, 315-17. Relative pound Sterling to 2011 Great Britain. For an in- 2013). 2011 values for pounds US Dollar values were troduction to the debates Sterling were then calculated based on the average ex- and evidentiary diffi cul- 32 Hocker, Sower Printing through the website » change rate for 2011 of ties, see Ron Michener, House, 19-21, 23.

100 GHI BULLETIN SUPPLEMENT 12 (2016) The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

last issue in 1777, the almanac had an annual circulation of almost ten thousand.33

In his fi rst almanac, Sauer addressed public speculation that he would use his new press for a newspaper. At that time he rejected the idea, writing that fi xation on the news was a waste of “precious time” and that such periodicals were oft en fi lled with falsehoods. (“. . . daß mir gar nicht gesinnet ist, die edle Zeit solcher Gestalt zu verderben.”) Instead, he preferred to publish broadsides and distribute them gratuitously at churches and other public places when some “use” might arise for rapid dissemination of the news.34 But by the following year he acquiesced, announcing in the Calender his plans to begin running “a collection of useful and remarkable events . . . in these times of wars and rumors of wars.”35

On August 20, 1739, the fi rst issue of the newspaper appeared, titled Der Hoch-Deutsch Pensylvanische Geschicht-Schreiber, oder Sammlung Wichtiger Nachrichten aus der Natur und Kirchen-Reich (High German Pennsylvania Recorder of Events, or Collection of Important News from the Realms of Nature and the Church.) In 1745, Sauer changed the name to Hoch-Deutsch Pensylvanische Berichte, and from 1762 to 1777 his son published it under the name Germantowner Zeitung. The paper typically included news from Europe, others colonies, Pennsylvania politics, a local crime report, and occasional editorial comments from Sauer. Sauer culled his foreign news from a collec- 33 Edwin Wolf II, Germantown tion of sixteen newspapers that he received each month from Europe, and the Germans: An Exhi- bition of Books, Manuscripts, making his newspaper the prime conduit of information from across Prints and Photographs from the Atlantic for the German-speaking population in America.36 the Collections of the Library Company of Philadelphia and the Historical Society of Sauer presented the newspaper largely as a public service to the Pennsylvania (Philadelphia, German-speaking community. Even the advertisements, for which 1983), 96. Sauer did not initially charge, were primarily public service announce- 34 Der Hoch-Deutsch Ame- ricanische Calender 1739 ments, notifying readers of a lost coat, for example, or a stray animal. (Germantown, 1738), 23. When advertisement submissions became too numerous, he began $ 35 Der Hoch-Deutsch Ame- charging non-subscribers: fi ve shillings (approx. 28 in 2011 dollars) ricanische Calender 1740 for an advertisement in three issues, with the possibility of a rebate (Germantown, 1739), 23. if the goal of the advertisement was accomplished aft er the fi rst or 36 Der Hoch-Deutsch Pensyl- second issue. In 1741, he began listing a price of three shillings (ap- vanische Geschicht-Schrei- ber, July 16, 1743; prox. $18 in 2011 dollars) for a year-long subscription, but he did not Abraham H. Cassel, A His- seem to make strenuous eff orts to obtain payment from subscribers. tory of Sower’s Newspaper (unpaginated manuscript, By 1751, according to an editorial, Sauer had four thousand subscrib- Sept. 1, 1885), Collection ers. But many of them, he lamented, had neglected to pay for their Am. 1596, Historical Society of Pennsylvania, subscriptions even aft er receiving the paper for several years. At that Philadelphia.

LEAMANN | JOHANN CHRISTOPH SAUER 101 time, Sauer noted that 330 issues were being transported inland by a distributor along the Conestoga Road, where German settlements were growing quickly. Bundles of newspapers would be dropped off at centrally-located shops. Initially Sauer paid for the transport, but because of insuffi cient subscription payments, he asked the rural recipients to pay for the cost of the shipping. To facilitate payment, Sauer developed a network of agents in towns along the inland road. The distributor eventually ceased delivering papers for subscribers who did not pay for his services.37 That Sauer himself did not more quickly cease to send papers to delinquent subscribers indicates that he thought more was to be gained by keeping a larger number of papers in circulation throughout the areas of the colony where many new settlers were arriving.

The success of the paper can be measured in its increasing frequency and size. For the ﬁ rst decade, it was a monthly publication. But beginning in 1748 Sauer oft en printed two issues per month to accommodate the large number of advertisements and announcements he was receiving. By 1751, he printed two issues per month on a regular schedule. Apparently the advertisements paid for the cost of the extra issue because Sauer never raised the price of the subscriptions, despite doubling his labor time and use of paper. In 1756, he arranged with Gotthard Armbrüster, a former apprentice who had moved to Philadelphia, to begin supplying a German paper each week: while Sauer continued to print an issue on the ﬁ rst and sixteenth day of each month, Armbrüster printed issues for the alternate weeks. Ini- tially printed on one folded sheet, providing four 8x13-inch pages of print, Sauer and his son increased the size of the paper almost every decade until it featured 16x22-inch pages in 1775.38

Despite the newspaper’s growth, Sauer remained confl icted over the potential for the news business to be morally misleading. In an editorial from 1743, he resisted the idea of issuing a weekly paper because so much “news” turned out to be mere rumor; more rapid publication, he thought, would increase the chance of promulgating incomplete or false stories. He already had a diffi cult time fi nding enough material bearing the marks of “truth and usefulness” to fi ll 37 Pensylvanische Berichte, Nov. 1, his monthly issue, he claimed. Aft er he changed the name of the 1751; Hocker, Sower Printing House, 32. newspaper to Pensylvanische Berichte in October 1745, he explained that the new name was preferable because he did not want to claim 38 Der Hoch-Deutsch Pensylvani- sche Geschicht-Schreiber, July too much authority for the news that he printed: “Geschicht” de- 16, 1743; Cassel, Sower’s scribed a historical “event,” but so oft en, despite his care, he learned Newspaper; Flory, Literary Activity, 124-26. that what he had printed did not in fact occur exactly as initial reports

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had claimed. By replacing “Geschichts-Schreiber” with “Berichte,” he hoped to clarify that he was merely publishing “reports” that could be proved wrong with better information.39

In contrast to the news, Sauer’s greatest printing interest was the publication of a German Bible, whose cost to import from Germany he considered too high for many families in the American colonies. Sauer had been an authorized agent to sell the “Berleburg Bible,” which was produced in eight volumes by the radical Pietists from 1726 to 1742 in his old home region. Deeming it too large and expensive, he based his edition on the popular “Halle Bible,” a one-volume Pietist rendering of Martin Luther’s translation that Francke had designed to be aff ordable. To advance purchasers, however, Sauer off ered the option to add the third and fourth books of Ezra and the third book of Maccabees, as they appeared in the Berleburg Bible. Completed in 1743, the full version of Bible totaled 1,284 quarto-sized pages.40 39 Hoch-Deutsch Pensylvani- Publishing such a large Bible with fi ner paper required a signifi cant sche Berichte, Jan. 1, 1746; Cassel, Sower’s News- capital investment. Therefore, Sauer advertised for “subscriptions” paper. so that he could estimate the number of copies to print in advance: 40 Biblia, Das ist: Die Heili- buyers could make a deposit of three shillings, six pence (approx. ge Schrift Altes und Neues $22 in 2011 dollars) to reserve a copy. He also solicited charitable Testaments . . . (German- town, 1743). On the Berle- donations to help underwrite the costs so that it could be aff ordable burg Bible, see Schneider, enough for poorer families to own a Bible.41 Besides advertising the German Radical Pietism, 151-53. Bible with a sample page in his own newspaper, Sauer arranged for an announcement about the subscriptions to go out in the two 41 Prospectus in Der Hoch- Deutsch Pensylvanische main English newspapers of Philadelphia, Franklin’s Pennsylvania Geschicht-Schreiber, Aug. Gazette and Bradford’s Weekly Mercury. He also made Franklin and 16, 1743. Bradford authorized dealers of the Bible at whose shops interested 42 The Pennsylvania Gazette, Mar. 31, 1742, reprinted parties could make their deposit. With suffi cient charitable support, at Flory, Literary Activity, Sauer pledged that the fi nal price would not be greater than fourteen 75-76. $ 42 shillings (approx. 85 in 2011 dollars). 43 Edward W. Hocker, Germantown 1683-1933 Already in 1740 Sauer had several commitments from donors, includ- (Germantown, PA, 1933), 71; George Whitefi eld’s ing George Whitefi eld (1714-1770), the British revivalist preacher who Journals (Guildford, reprint came through Germantown in November 1739, preaching to fi ve or six 1960), 357. 43 thousand people. Following the wave of local interest in Whitefi eld, 44 Von Georg Weitfi elds Pre- Sauer printed German translations of his sermons in three volumes.44 digten . . . (Germantown, 1740). As Sauer reported to Dr. Luther in the fall of 1740, the English minis- ter was very encouraging of the Bible project. Whitefi eld had pledged 45 Sauer to Luther (Germantown, Sept. 1740), to petition a charitable society in London to underwrite the costs of at Egenolff -Luthersche the Bible’s paper, which would be shipped from England.45 But in Schrift giesserei, 38; Sauer to Luther (Oct. 11, 1740), the end, the support from England did not come through, and Sauer at ibid., 39.

LEAMANN | JOHANN CHRISTOPH SAUER 103 reported that only two small donations had been received. The ﬁ nal price was twelve shillings (approx. $80 in 2011 dollars) for unbound copies or eighteen shillings (approx. $120 in 2011 dollars) for copies bound at the workshop of the Seventh-Day Baptist Brethren in Ephrata. The paper alone cost seven shillings, six pence per copy (approx. $50 in 2011 dollars). Though he had fewer than three hundred subscriptions, Sauer produced twelve hundred copies.46

46 Hocker, Sower Printing House, News of Sauer’s Bible spread throughout Europe, and it became a 39-44. point of pride for many Germans that a Luther Bible was the ﬁ rst 47 Heinrich Melchior Muhlen- European-language Bible to be published in America — second berg to Gotthilf August Francke and Friedrich Michael only to John Eliot’s “Indian Bible” of 1663. But it also faced serious Ziegenhagen (Philadelphia, Mar. 6, 1745), in Kurt Aland, opposition from Lutheran and German Reformed clergy, who con- ed., Die demned it because of Sauer’s sectarian commentary and additions Korrespondenz Heinrich Melchior Mühlenbergs: aus from the Berleburg Bible. The German clergy already regarded Sauer der Anfangszeit des deutschen as a major challenge for their work in the colonies because of the Luthertums in Nordamerika, 5 vols. (Berlin, 1986-1993), anti-clerical bias of his editorial comments in his almanac and news- 1:150. paper. For example, the leader of the Lutheran Church in colonial

48 Theodore G. Tappert & John America, Henry Melchior Muhlenberg (1711-1787), once wrote back W. Doberstein, eds., The to church overseers in Halle to complain that Sauer “disparaged the Journals of Henry Melchior 47 Muhlenberg, 3 vols. (Philadel- Lutheran denomination at every opportunity.” He also noted in his phia, 1942-58), 1:153, 312- journals that Sauer delighted to report scandals and immoral behav- 13. On Sauer and Muhlenberg’s 48 relationship, see Donald F. ior among the high church pastors. Both Lutheran and Reformed Durnbaugh, “J.C. Sauer and minsters warned their parishioners not to buy Sauer’s Bible, but to H.M. Muhlenberg: German- American Protagonists in await donations of versions authorized by their churches in Europe Colonial North America,” in instead.49 Their opposition might have had an impact on the Bible’s Hans-Jürgen Grabbe, Halle Pietism, Colonial North Ameri- sales: it took Sauer and his son almost twenty years to sell all his ca, and the Young United States unsubscribed copies. But thereaft er, Sauer’s son published second (Stuttgart, 2008), 93-112. and third editions in 1763 and 1776, which reaped such a surprising 49 Hoch-Deutsch Pensylvani- sche Berichte, Oct. 16, 1745; income that he began publishing a new theological periodical and Muhlenberg to Francke and distributing it for free so that he would not feel he had proﬁ ted from Ziegenhagen (Mar. 6, 1745), 50 in Aland, Korrespondenz, the sale of the Bible. 1:150; Flory, Literary Activi- ty, 95-96. If Sauer’s editorializing detracted from the rapid and broad sale of

50 Biblia, das ist: die Heilige his fi rst Bible, the newspaper and almanac still created marketing Schrift Altes und Neues Testa- synergies that Sauer exploited for his multiple publications. For ments. . . (Germantown: Christoph Sauer, 1763); instance, he distributed the fi rst issue of his newspaper gratis as an Biblia, das ist: die ganze insert in his Calender for 1740, which went to press at the same time. göttliche Heilige Schrift Alten und Neuen Testaments. . . Thereby he was able to solicit his fi rst subscribers from among his (Germantown, 1776). Sauer Jr. current customers at no extra cost for transportation. Likewise, when named the periodical Ein Geistliches Magazien and he solicited subscriptions for his Bible, he included an advertisement published it between 1764 and a sample page as an insert in his newspaper, ensuring that news and 1772. Hocker, Sower Printing House, 74-75. of his undertaking would travel far beyond Germantown. Both the

104 GHI BULLETIN SUPPLEMENT 12 (2016) The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

almanac and newspaper regularly announced books available for sale at his print shop (both his own as well as imported ones), advertising them at “low prices” or for “free to those who cannot pay.” The books off ered at no cost were likely the donations that benefactors in Germany had entrusted to Sauer.51

By 1749, Sauer used his Roman (antiqua) type to venture into English- language printing, providing several spiritual texts that appealed in particular to Quakers, like the writings of François Fenelon (1750, 1756) and John Everard (1756). This further developed a sense of common purpose between German sectarians and Quakers, which Sauer was cultivating through his political advocacy. Christoph Sauer Jr., who unlike his father was ﬂ uent in both German and English, oversaw the English publications, adding an English almanac, The Pennsylvania Town and Country-man’s Almanack, in 1753. German-language texts, however, remained the focus of the Sauer printing house until it was shut down and seized by the Pennsylvania government during the Revolutionary War.

Whether printing made Sauer a fi nancially successful businessman 51 Der Hoch-Deutsch Americanische is diffi cult to judge. The press was, to say the least, certainly not a Calender 1739 (German- non-profi t endeavor. One associate claimed that Sauer earned at least town, 1738), 23. one thousand fl orins (approx. $12,500 in 2011 dollars) within his fi rst 52 Schütz to Luther (Oct. 3, year of printing,52 but with a considerable expansion of his output 1740), at Egenolff - Luthersche Schrift giesserei, aft er the fi rst year, Sauer’s profi ts likely rose considerably as well. 36 (quoting fellow By 1751, with four thousand subscribers to his newspaper, his gross correspondent in Springfi eld Manor, Penn- annual income would have been twelve thousand shillings (approx. sylvania, Oct. 6, 1739); $ Hocker, “Sower Printing 70,000 in 2011 dollars) from newspaper subscriptions alone — if he House,” 17. had collected all that he was due. Paid advertisements, the almanac, 53 Hocker, Sower Printing and contract book-printing would have also brought in additional House, 58. revenue. According to the pricing notes that a local surveyor made $ 54 Inventory of seized prop- in his diary in 1751, Sauer would have earned £125 (approx. 14,600 erty and auction returns in 2011 dollars) to print fi ve hundred copies of a large hymnal-size reprinted at Hocker, So- 53 wer Printing House, 99- book requiring fi ft y sheets of paper. Sauer employed young men 106. Because of volatile to work on the press, but records do not reveal how much he paid infl ation rates for colonial currencies during out in total labor costs and apprentice stipends each year. What is the Revolutionary War, certain is that by 1778, when the Sauer press was confi scated by the it is notoriously diffi cult to determine a historical revolutionary Pennsylvania government, Sauer’s son possessed a exchange value between very large estate, including over 200 acres of land in Germantown the Pound Pennsylvania and Pound Sterling. The and nearby townships and the paper mill on the Schuylkill River. sum named here compiles The commonwealth carefully documented the sale prices for all sales in Pennsylvania currency over the course of of his seized real estate and moveable property over the following three years and thus re- three years, totaling almost £75,000 (in the depreciated wartime fl ects diff erent exchange values vis-à-vis the Pound Pennsylvania currency).54 When Sauer’s grandson submitted claims Sterling.

LEAMANN | JOHANN CHRISTOPH SAUER 105 for indemnifi cation from the British crown for his losses, he estimated the value at £7,000 Sterling (approx. $1.1 million in 2011 dollars).55 55 Christopher Sauer III entered Though that sum would not have accounted for the full value of the claims for indemnifi cation in 1785 aft er his fl ight to Eng- family’s property, this alone was thirty-three times the median net land at the end of the Revolu- worth bequeathed by residents of the Mid-Atlantic colonies in the tionary War. James O. Knauss, 56 “Christopher Saur, The Third,” 1770s. For his own part, however, Sauer claimed that making a profi t Proceedings of the American was never his goal. Instead, he consistently expressed his esteem Antiquarian Society 41 (1932): 235-53, here 241-43; Willi for the press according to the religious and civic function it fulfi lled. Paul Adams, “The Colonial German-Language Press and As he wrote towards the beginning of his printing endeavors, his the American Revolution,” satisfaction would come when the poor could buy a Bible “and the in Bernard Bailyn & John B. Hench, eds., The Press and the miser could not excuse himself from putting something useful in the American Revolution (Worces- hands of his children.” With good humor and confi dence, he added, ter, MA, 1980), 151-228, here 57 172-73. Though the conver- “I will have bread enough.” sion dollar value provided here is based on an “historic stan- Social Status, Networks, Family and Public Life dard of living” estimate, an alternative “economic status” or Through the success of his newspaper and almanac, Sauer gained “prestige” value for a £7,000 Sterling estate would estimate a strategic position in Pennsylvania politics and culture. As Henry it as equivalent to $18 mil- Melchior Muhlenberg wrote in 1754, Sauer’s newspaper was “univer- lion in 2011 dollars. See “Five Ways to Compute the Relative sally read by the Germans all over Pennsylvania and the neighboring Value of a UK Pound Amount” Colonies.”58 Like Benjamin Franklin, his great rival in both printing (http://www.measuringworth. com/ukcompare/relativeval- and politics, Sauer found that his position as a primary information ue.php). broker gave him the opportunity to infl uence public morality and

56 A probate study found that the political decision-making. median net worth of decedents in the Middle Colonies in 1774 Early in his publishing career, Sauer showed an interest in addressing was approximately £360 in Pennsylvania’s currency or several issues of social morality. In 1741, he wrote and published A £212 Sterling (approximately $33,750 in 2011 dollars), Consideration of the Vice of Drunkenness and he began to use his news- while median net worth for papers and almanacs to condemn the practice of slavery. In his 1742 decedents in Philadelphia County, where Germantown Calender, for instance, Sauer wrote of slavery as America’s “especially lies, was £424 in the local cur- loathsome sin”: “So many poor black slaves are stolen from Africa rency (approximately $39,800 in 2011 dollars). Alice Hanson and sold just like merchants’ other wares or like cattle, even though Jones, “Wealth Estimates for they are humans just like all Adam’s children, regardless of the color the American Middle Colo- nies, 1774,” Economic Deve- of their skin.” He condemned the fact that Germans in America were lopment and Cultural Change adopting the English “vice” of buying slaves and warned his readers 18 (1970): 1-172, here 49, 54. Sauer III’s claim would not with a passage from the prophet Jeremiah about the curse that was have reﬂ ected the full value of due those who made others work without pay.59 his father’s estate because of restrictions on what property 57 Sauer to Luther (Oct. 11, Germans (Providence, nerships,” Pennsylvania the British claims commis- 1740), at Egenolff -Luther- Aug. 3, 1754), in The Pa- Magazine of History and sion considered. See Eugene sche Schrift giesserei, 39; pers of Benjamin Franklin, Biography 121 (1997): R. Fingerhut, “Uses and Abus- see also Sauer to Luther vol. 5 (New Haven, 1962), 329-50, here 345. es of the American Loyalists’ (Sept. 1740), ibid., 38. 418; Ralph Frasca, “‘To Claims: A Critique of Quantita- Rescue the Germans Out 59 Der Hoch-Deutsch Ame- tive Analyses,” William & Mary 58 Muhlenberg, Minutes of of Sauer’s Hands’: Benja- ricanische Calender 1742 Quarterly 25 (1968): 245-58, the Society for the Relief min Franklin’s German- (Germantown, 1741), 20, here 246-47. and Instruction of Poor Language Printing Part- quoting Jeremiah 22:13.

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Sauer was struck by the off ensiveness of German participation in the slave trade, in particular, because many German immigrants had themselves just recently emerged from being “half-slaves” in their homeland, where they, too, could not reap the full value of their la- 60 Ibid., 21. 60 bor. Moreover, many Germans arrived in America under their own 61 See Sauer to Gov. conditions of indentured servitude. Sauer had become increasingly Morris (March, 15, 1755), at Brumbaugh, German concerned about their lot as well. He began to report on abusive treat- Baptist Brethren, 377. ment of immigrants by the captains and merchants of the ships that 62 Glaubhaft es Send-Schreiben brought them to America. He also warned potential emigrants of the aus Pennsylvania in Ame- rica. . . welchen beygefüget ways they could be taken advantage of during their journey. In 1739, ein anderer merckwürdi- he signed an open letter that was published in the German lands, ger Brieff aus bemeldten Landen. . . (Frankfurt am advising prospective emigrants to consider the disadvantages of Main, 1739) (letter dated trans-Atlantic migration carefully before heading to the New World. Nov. 25, 1738), trans. Durnbaugh, Brethren in There had been numerous tragedies on the ocean passage in the prior Colonial America, 41-53. year, and Sauer worried that the optimistic descriptions of his earlier On the diminishing 61 opportunities to buy land dispatches had led the victims to their deaths. The signatories to the and the looser religious letter wanted to dispel any fantasies that immigrants would fi nd life commitments of mid- eighteenth-century easy once they arrived on American soil. Prices for land had become German settlers, see much higher than they once were, they reported, and the admirable Marianne S. Wokeck, “German Settlements moral earnestness and humanitarian spirit of Pennsylvania’s fi rst in the British North settlers had been diluted by the more recent infl ux of fortune seekers American Colonies: A Patchwork of Cultural 62 who did not share the founding ethos of the colony. Assimilation and Persistence,” in Lehmann, Nevertheless, increasing numbers of Germans were undeterred. Wellenreuther & Wilson, In Search of Peace and Sauer responded to the massive spike in German immigration be- Prosperity, 191-216, here tween 1745 and 1755 by publishing advice in his almanacs to help 202-205. newcomers acclimate themselves to life in the colony. In 1751, he pub- 63 Eine Nützliche Anweisung oder Beyhülfe Vor die lished a manual for German-speakers to learn English, and he oft en Teutschen um English zu included short English lessons in his almanacs.63 Aft er Thomas Penn lernen . . . (Germantown, 1751). (1702-1775), the controlling proprietor of the colony, raised the price for vacant land and closed the General Loan Offi ce (through which 64 Spencer Aaron Fogelman, Hopeful Journeys: German many German immigrants were able to purchase their fi rst lots), Immigration, Settlement, Sauer began printing articles to educate Germans about how to buy and Political Culture in Co- lonial America, 1717-1775 and bequeath land under English law. He emphasized, in particular, (Philadelphia, 1996), 97- the importance of paying debts on time, an expectation among the 99, 134, 141-42; Hermann Wellenreuther, English that Germans settlers were apparently less accustomed to “Contexts for Migration in meeting.64 When the business of the trans-Atlantic passage showed the Early Modern World: Public Policy, European no signs of reform, Sauer lobbied actively for laws to improve the con- Migrating Experiences, ditions on ships carrying immigrants from Germany. Alarmed by the Transatlantic Migration, and the Genesis of Ameri- number of deaths that were occurring onboard due to unsanitary and can Culture,” in Lehmann, crowded conditions, Sauer wrote twice to Pennsylvania Governor Wellenreuther & Wilson, In Search of Peace and Pros- Robert Hunter Morris (1700-1764) to object that ship captains perity, 3-35, here 31-32.

LEAMANN | JOHANN CHRISTOPH SAUER 107 “lodge the poor passengers like herring” and carried insuffi cient 65 Sauer to Gov. Morris (Mar. 15, 1755) and Sauer to Gov. Mor- food and water in the event that weather made the journey longer ris (May 12, 1755), at Brum- than anticipated.65 baugh, German Baptist Bre- thren, 376-387, here, 377; Sally Schwartz, “A Mixed Mul- Beginning in the mid-1740s, Sauer also campaigned for Germans in titude”: The Struggle for Tole- Pennsylvania to become naturalized citizens in order to have a role ration in Colonial Pennsylvania 66 (New York, 1987), 196-200. in provincial policymaking. It was the prospect of militarization that led Sauer to become more explicit in his political advocacy. As settlers 66 Fogelman, Hopeful Journeys, 131-42, Jan Stievermann, “A on the Pennsylvania frontier began to call for an organized defense ‘Plain, Rejected Little Flock’: against Indians, Sauer urged his readers to support the paciﬁ st Quak- The Politics of Martyrologi- cal Self-Fashioning among ers in elections for the provincial assembly. If the Quakers lost the Pennsylvania’s German Peace reins of government, Sauer warned, Germans could lose the religious Churches, 1739-65,” William and Mary Quarterly 66 (2009): liberties that many had come to Pennsylvania to enjoy, such as free- 287-324, here 317-20. dom from military conscription and state-church assessments.67 In 67 For a contemporary assess- order to educate more recent German immigrants on the rights they ment of Sauer’s editorializing to this eff ect, see Tappert & enjoyed under the Quakers, Sauer published a German translation of Doberstein, Journals of Muh- William Penn’s 1701 “Charter of Liberties” and distributed copies free lenberg, 2:191. of charge to all the subscribers of his newspaper.68 In his newspaper 68 William Penn, Der Neue editorials, he portrayed the Quaker Party as the guardian of Penn’s Charter. Oder Schriffl iche Versicherung, Der Freyheiten founding vision, which had made Pennsylvania a religious haven (Germantown, 1743 [1744]). for his readers — a place of peace where pious people could carry

69 Patrick M. Erben, A Harmony out their religion in freedom while living amicably with the Indians. of the Spirits: Translation and This vision was becoming remote, he believed, because too many the Language of Community in Early Pennsylvania (Chapel newcomers with worldly motives for their settlement in the colony Hill, 2012), 244-45; Stiever- did not respect contractual dealings with the native tribes.69 mann, “Little Flock,” 317-18; Schwartz, Mixed Multitude, 159-60, 162-63. Aft er England began to ﬁ ght King George’s War in 1747, fears became more acute that the local Indian tribes would ally with the French 70 [Benjamin Franklin], Die Lau- tere Wahrheit, Oder Ernstliche and attack Pennsylvania colonists’ settlements. Because the Quaker- Betrachtung des gegenwärtigen Zustandes Der Stadt Philadel- controlled Assembly had not raised a common defense, Benjamin phia in der Provintz Pensylva- Franklin called for citizens to join a voluntary militia. When Franklin nien. . . [Philadelphia, 1747]; [Christopher Sauer], Klare und published propaganda in German to attract support among the Ger- Gewisse Wahrheit. . .von ei- mans for the militia, Sauer countered with several pamphlets. He did nem Teutschen Geringen Hand- wercks Mann (Germantown, not rely solely on the paciﬁ st theology of the Anabaptist sects, but 1747); [Christopher Sauer], also tried to sway Lutherans and Reformed by appealing to Germans’ Ein Gründliches Zeugnüsz gegen das kürtzlich herausgegebene common memory of manorialism: a militarized state, he predicted, Büchlein, genandt Plain Truth would assess more and more fees in the name of defense, just as Ger- (1748); [Christopher Sauer] Verschiedene Christlich Wahr- man lords had done, and before long Pennsylvania Germans would heiten, und Kurtze Betrachtung become vassals again — now to their English proprietors.70 über das kürtzlich herausgegebene Büchlein, Genandt Lau- tere Wahrheit (Germantown, Thanks in part to German immigrant voters, the Quaker Party stayed 1748). Erben, Harmony of in power throughout the war. The issue of raising a militia, however, Spirits, 247-51; Stievermann, “Little Flock,” 287-324. did not go away. Frustrated by their inability to capture much of the

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German vote, the anti-Quaker faction attempted at several points to begin German-language newspapers that would, as Lutheran leader Muhlenberg put it, “rescue the Germans out of Sauer’s hands.”71 71 Muhlenberg to the Soci- ety for the Relief and In- Between 1743 and 1755 there were fi ve attempts to publish other Ger- struction of Poor Germans man or bilingual newspapers in the Philadelphia area. But Sauer con- (Aug. 3, 1754), in Papers of Benjamin Franklin 5:418- tinued to corner the market, and each of them failed. Sauer’s success 19; quoted in Frasca, “To was one of the underlying sources of frustration that led Franklin to Rescue the Germans Out of Sauer’s Hands,” 329, pen his notorious sentiments in 1751 regarding the “Palatine Boors” 345. who “by herding together establish their Language and Manners to 72 “Observations Concerning the Exclusion of ours.”72 Franklin felt that Sauer’s press was inhibit- the Increase of Mankind” ing German immigrants not only from assimilating, but also from (1751), Papers of Benjamin Franklin 4:225-35, here appreciating the political and military necessities of governance. He para. 23. apparently did not recognize Sauer’s own eff orts to instruct German 73 Samuel Edwin Weber, The immigrants about English customs, laws, and language. Charity School Movement in Colonial Pennsylva- nia (Philadelphia: George To overcome Germans’ reliance on Sauer for information and opinion, Lasher, 1905), 38-39, Franklin and his allies also formed a society in 1753 to found “charity 53-62; Whitfi eld J. Bell, Jr., “Benjamin Franklin schools” that would teach German immigrant children the English and the German Charity language and customs. Sauer led the opposition to the plan, calling Schools,” Proceedings of the American Philosophical it an attempt by high churchmen to indoctrinate poor children and Society 99 (1955): 381-87; pry them away from the religion of their parents. Though the schools Glenn Weaver, “Benjamin Franklin and the Penn- were to be led by prominent Lutheran and Reformed pastors, Sauer sylvania Germans,” Wil- warned that the schools cared little about religion and were mainly liam and Mary Quarterly 14 (1957): 536-59; Alan intended to produce Germans who would be willing to defend the Tully, Forming American property of the English proprietors in their stead. On this issue, too, Politics: Ideals, Interests, and Institutions in Colonial Sauer swayed the sentiments of most of the German settlers. Few New York and Pennsylvania families enrolled their children, and none of the schools lasted more (Baltimore, 1994), 109, 111, 156; Schwartz, Mixed than a decade.73 Multitude, 216; Sharon Braslaw Sundue, “Confi n- ing the Poor to Ignorance? It was during the same decade, however, that Sauer’s infl uence Eighteenth-Century Amer- among German immigrants reached its limit. Because many Ger- ican Experiments with Charity Education,” Histo- man Lutherans and Reformed were settling in the Pennsylvania ry of Education Quarterly backcountry among Scotch-Irish Presbyterians, they increasingly 47 (2007): 123-48, here 135-36. viewed Sauer’s advocacy of nonresistance to be inimical to their interests.74 When the French and Indian War broke out and raids on 74 Fogelman, Hopeful Jour- neys, 140-41. For an early European settlements increased, preventing a colonial militia became German retort to Sauer, a losing battle for Sauer and the Quakers. But even aft er Governor see Kurtze Verteidigung Der Lautern Wahrheit ge- Morris declared war on the Delaware tribe in 1756, Sauer worked gen die so genannte Un- with the Quaker leader Israel Pemberton, Jr. (1715-1779) to continue terschiedliche Christlich Wahrheiten, Welche der to advocate for mediation with the Indians, blaming the recent raids Buchdrucker C.S. in Ger- on Europeans’ greed for land and abrogation of the contractual rela- mantown ohnlängst aus- gestreuet [Philadelphia, tionships that earlier Pennsylvanian leaders had forged. He helped to 1748].

LEAMANN | JOHANN CHRISTOPH SAUER 109 raise signiﬁ cant donations from German sectarians for Pemberton’s “Friendly Association for Regaining and Preserving Peace with the Indians by Paciﬁ c Measures” and employed texts from both the Ana- baptists’ and Quakers’ martyrological traditions to engender solidarity among both groups and to help them prepare for the persecution that might come if they held on to their peace stance.75

It was not until aft er Sauer’s death that the Sauer family’s stronghold over German media was broken. In 1762, Henrich Miller founded a German newspaper that gained a following among Germans who supported a militaristic response to the Indians.76 Still, under Johann Christoph Sauer Jr. the family printing business continued to ﬂ ourish. Known as one of the wealthiest men in Pennsylvania, Sauer Jr. was a major benefactor and board president of the Germantown Academy, founded in 1760. As a bishop of the German Baptists, he continued his father’s special interest in radical Pietist texts as well as his advocacy of peaceful relations with the Indians.77

So prominent was Sauer Jr.’s paciﬁ sm that he became a target for Revolutionary patriots during the war for American independence. Sauer Jr. did not hide his disapproval of the revolutionaries’ choice of war to redress their grievances. His sons, Christoph III and Peter, went further: when the British Army captured Germantown in 1777, they collaborated with General Howe to print Loyalist propaganda for the local Germans and Hessian soldiers from a shop in Philadelphia. 75 For translations of Sauer’s Once the British were pushed out of Pennsylvania, they retreated to writings related to the “Friend- ly Association,” see Richard K. New York with General William Howe (1729-1814), where Christoph MacMaster, Samuel L. Horst, III served as both printer and spy for the British. Aft er the war, he and Robert F. Ulle, eds., Con- science in Crisis: Mennonites and evacuated with the troops to England, where he was rewarded for his Other Peace Churches in Ame- rica, Interpretation and Docu- services to the crown. Named royal printer and deputy postmaster for ments (Scottdale, PA, 1979), the province of New Brunswick, he spent most of his life there aft er 135-56; Stievermann, “Mar- tyrological Self-Fashioning,” 1785, founding two English newspapers. Peter, meanwhile, became 317-23; Erben, Harmony of a physician in the British West Indies.78 Spirits, 275-83.

76 Patrick Erben, “Henrich Miller,” Sauer Jr., however, suff ered a dramatic setback for printing his objec- in IE. tions to the revolution. Acting on a proclamation of treason by the

77 Flory, Literary Activity, 148-57; Pennsylvania Supreme Executive Council in 1778, the Continental Hocker, Sower Printing House, Army arrested Sauer, seized his press, ejected him from his German- 66-90; Durnbaugh, Brethren in Colonial America, 386. town home, and conﬁ scated all other properties in his estate. Upon his arrest, he was stripped of his clothes and coated in paint as hu- 78 Durnbaugh, Brethren in Colo- nial America, 405-23; Hocker, miliation. The contents of the print shop were sold off for a fraction of Sower Printing House, 110-15, their value to other printers, including Henrich Miller, who had sided Knauss, “Christopher Saur, The Third,” 235-53. with the revolutionaries. Having lost his home and fortune, Sauer Jr.

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was reduced to dependence on in-laws for lodging for several years and, without a press, had to make a living as a bookbinder until he died six years later.79

Despite the end of the Germantown press, two of Sauer Jr.’s younger sons continued printing in Pennsylvania: David founded the ﬁ rst newspaper for Norristown, Pennsylvania, and Samuel restarted an almanac and newspaper from nearby Chestnut Hill, later moving his press to Philadelphia and Baltimore. Subsequent generations of the Sauer family ran printing presses in Philadelphia, Norristown, Baltimore, and Leesburg, Virginia, into the early twentieth century.80

Conclusion On his way to developing the most successful German-language press in colonial America, Johann Christoph Sauer drew deeply on the trans-Atlantic networks of radical Pietist and Anabaptist groups to forge business relationships and cultivate a readership that shared his religious inclinations. He and his son amassed enormous good will among the German sectarians for bringing their theological and devotional works into print and articulating their ethical convictions in the public sphere. By printing many German translations of Quaker and English Pietist texts in German for the ﬁ rst time, he also enabled greater religious exchange and a sense of shared purpose among the Quakers and German peace churches — an alliance that had important political consequences in the 1740s and 1750s.

While Sauer shrewdly appealed to all German-speaking immigrants in his humanitarian and political advocacy, he did not feel compelled to display an ecumenical or ironic sensibility toward all Germans in his publications. He distrusted the leadership of the Lutheran and Reformed churches as much in America as he did in Germany, and he viewed non-sectarian, non-pacifi st German immigrants as contributing to the dissolution of the Quakers’ founding vision for Pennsylva- nia. His religious convictions and loyalty to that political ideal took 79 Pennsylvania Supreme precedence over his ethnic identity. That this was little impediment Executive Council, A Proc- lamation [May 21, 1778] to his business success testifi ed to the demographic strength of the (Lancaster, PA, [1778]). German sectarians during the early and mid-eighteenth century: his Durnbaugh, Brethren in Colonial America, 396- alliance of German and English Pietists placed him at the nexus of 405; Hocker, Sower Prin- a populous and infl uential group of people. By the time that his son ting House, 99-106. and grandsons were working as printers, however, they encountered 80 Wolf, Germantown and the adverse consequences of being part of an outnumbered sect. Yet the Germans,107-10; Hocker, Sower Printing thanks in part to the strength of Pennsylvania’s tradition of religious House, 115-23.

LEAMANN | JOHANN CHRISTOPH SAUER 111 liberties, which the Sauers arduously defended, the new nation that formed at the cost of their press and family fortune proved to be more respectful of religious minorities and free expression than the Sauers had feared.

Hans Leaman (Ph.D. Yale University; J.D. Yale Law School) was a postdoctoral associate in history at Yale University from 2014 to 2016. He held a GHI Fellow- ship at the Horner Memorial Library of the German Society of Pennsylvania in Summer 2016. He is now an independent scholar with particular interests in the history of Anabaptism, theological interpretations of exile, and the development of migration and asylum rights.

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JOHANN ANDREAS ALBRECHT: MAKING RIFLES IN EIGHTEENTH-CENTURY MORAVIAN ECONOMIES

Scott Paul Gordon

Johann Andreas Albrecht (born April 2, 1718, near Suhl, Electorate of Saxony, Holy Roman Empire; died April 19, 1802, Lititz, PA) was a European-trained gunstocker, who emigrated in 1750 to the Moravian community of Bethlehem, Pennsylvania. Albrecht had little opportunity to ﬂ ourish in his profession, however, because the coordinated economies of the Moravian settlements had little need for a full-time gunstocker and so, for much of two decades, authorities deployed Albrecht as a music teacher and a tavern keeper. Nevertheless, it was Albrecht who in 1763 established a new gun shop at Christiansbrunn, which supplied arms to Pennsylvania during the American Revolution. At Christiansbrunn and later at Lititz, another Moravian community where he lived the last three decades of his life, Albrecht trained a new generation of gunsmiths, including Christian Oerter and William Henry Jr.

Albrecht’s experience reveals the constraints that religious convictions and, in particular, membership in the Moravian Church in early America placed on the pursuit of profi t. Recent work on Moravian communities has shown that church authorities worked hard to ensure that their unusual economies earned a much needed profi t, which was used to fi nance the Moravians’ ambitious missionary projects around the globe.1 But the church could count on this profi t only if many individual tradesmen and craft smen, whose labors produced the surplus that the church appropriated and redeployed into mission work, made no claims upon those funds. For two decades aft er he immigrated to America, Albrecht opted out of the colonial economy in which some individuals thrived and others struggled. Perhaps if Albrecht had lived in a city, town, or frontier community where a gunstocker could fl ourish, he would have leveraged his training and talents into fi nancial success. Instead, he chose to live in Moravian communities that discouraged worldly ambition, entrepreneurial risk, and the accumulation of individual wealth. That he lived in these communities contentedly reveals how much religion, rather than a desire for individual profi t, shaped Albrecht’s long career.

Early Life and Wartime Service 1 Katherine Carté Engel, Johann Andreas Albrecht was born near Suhl, Electorate of Saxony, Religion and Proﬁ t: Moravians in Early America on April 2, 1718, the eldest son of Michael and Margaretha Elisabeth (Philadelphia, 2009).

GORDON | ANDREAS ALBRECHT 113 2 November 19, 1766, Church Albrecht. His parents raised him as a Lutheran and apprenticed him Register of the Moravian Con- 2 gregation at Bethlehem, Vol. to a gunsmith at the age of 13 in 1731. Gunsmithing in Suhl had be- 2, 1756-1801, ChReg 11, gun as early as 1535, fueled by the rich iron ore — from which workers Moravian Archives, Bethle- hem (hereaft er, MAB); Ad- had been producing pig iron, ideal for gun barrels — in the Thuringian dendum to the Lititz Diary of Mountains that surround the town. By 1553, eight gunsmiths worked April and May [1802], [hereaft er, Albrecht Lebenslauf], in the town that had a population of about 4,500, and the gunsmiths MAB [trans. Edward Quinter]. of Suhl established a guild a decade later. In 1631, Suhl’s gunsmiths Albrecht described his early life in this Lebenslauf, a mem- produced nearly 29,000 muskets, and business boomed throughout oir that he, like most Mora- the Thirty Years War (1618-1648), when the region supplied weapons vians, wrote as a spiritual exercise and a template from to Denmark, Belgium, and Austria, among other combatants. Many which a funeral discourse could be craft ed. Albrecht of these were simple guns, but others — as surviving examples probably wrote his shortly af- demonstrate — were superbly carved and engraved. In the 1730s, during ter he arrived in Bethlehem, perhaps in 1752. A slightly Albrecht’s apprenticeship, the Suhl gun industry produced rifl es diff erent version of the Le- not just for the European market but also for the transatlantic trade. benslauf, translated by Lothar Madeheim from the 1803 Ge- Caspar Wistar (1696-1752), who immigrated to Pennsylvania in 1717, mein Nachrichten [Beilage No. imported more than fi ft y rifl es, many especially tailored for the American 11.2.1, MAB], appeared in William S. Bowers, Gunsmiths market, from gunsmiths in Suhl and Rothenberg between 1731 and of Pen-Mar-Va, 1790-1840 1745. An assessment of the population, which suff ered greatly (Mercersburg, PA, 1979), 8-10. For the Lebenslauf tra- aft er a devastating fi re in 1753, revealed that some 82 gunsmiths, dition, see Katherine Faull, 60 gunstockers, and nine gun barrel makers practiced their trades Moravian Women’s Memoirs: Related Lives, 1750-1820 in the community. The fi re marked the peak of Suhl’s gun industry, (Syracuse, 1997), and Thomas however, as the trade did not recover from the confl agration.3 J. McCullough, “‘The Most Memorable Circumstances’: Instructions for the Collection Albrecht’s master trained him as a gunstocker. While the term gunsmith of Personal Data from Church might describe men who repaired guns, produced specialized gun parts Members, circa 1752,” Jour- nal of Moravian History 15, (such as barrels or locks), or created an entire gun from scratch, the no. 2 (2015): 159-76. term gunstocker, the profession associated with Albrecht throughout

3 Peter Ravn Lund, “Gunmaking his career, describes the craft sman who would carve and shape the in Suhl,” in Christoph Funk, stock of a riﬂ e and assemble the other components — the gunlock Gewehrfabrik, Suhl (Denmark, 2012), 11-15; “A History of and the barrel — into a finished product.4 A gunstocker might Gunmaking in Suhl,” http:// produce a plain, unornamented stock or he might craft a highly ornate, www.germanhuntingguns. com/Sections/Page. carved stock, perhaps with inlaid wire or other designs. Albrecht asp?SSID=731&NRID= 1&Tag=Suhl10 (accessed completed his apprenticeship in 1738, at the age of 20, at which point October 13, 2015); Rosalind he became a journeyman gunstocker. Young gunsmiths who had Beiler, Immigrant and Entrepreneur: The Atlantic completed their apprenticeships typically undertook a Wanderjahr, World of Caspar Wistar, traveling from place to place to hone their skills and learn varied styles 1650-1750 (University Park, 2008), 145-46. or techniques. Albrecht worked ﬁ rst in Halberstadt (some 100 miles north of Suhl in the Kingdom of Prussia) and then, in 1739, accompanied 4 The Lititz Diary memoir by another gunsmith, he relocated to nearby Wolfenbüttel, where he twice uses the term “gunsmith” (Büchsenmacher), whe- returned the following year to “do work for the soldiers.” By 1741, the reas the Gemein Nachrichten First Silesian War had begun and Albrecht, attached to a regiment memoir uses “gunstocker” (Büchsenschäft er). as a “gunmaker,” was encamped at Brandenburg. He soon joined

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the Anhalt-Dessau regiment and with it he spent winter quarters in Berlin. He traveled with this regiment to Halle/Saale, near Leipzig, the following year at the end of the war.

In Halle, Albrecht fi rst encountered the Moravians. Albrecht had long struggled spiritually, but aft er hearing a lecture by Count Nicholas Ludwig von Zinzendorf (1700-1760), the leader of the renewed Moravian Church, he found his spiritual home. With a fellow soldier, he traveled to the Moravian settlement at Herrnhaag in 1742 or 1743, and he later testifi ed that the time he spent there was an “unforgettable blessing.” Albrecht wished that he could “live among such a group of people” and “enjoy their beautiful worship services,” but in 1744 he went again to war.5 Albrecht wrote to the Moravians that, as he marched with his regiment, he could fi nd “rest and satisfaction” only when his “Heart lies completely” at the Savior’s “feet and I tend to his wounds”: only then “anxiety and hurt leave me, and I am happy.” “My whole heart,” Albrecht assured his brethren, “lived and loved and had enjoyment in His Wounds.”6 He carried to war a small book in which Moravian authorities specifi ed a watchword (Losung) for daily devotion. Albrecht fought in the Battle of Soor, at which Austrian forces surprised the Prussian Army on September 30, 1745. “Whoever could fl ee, fl ed, myself included,” Albrecht wrote, escaping the “shining sabers” of the Hussars “without the slightest damage 5 Albrecht Lebenslauf, MAB. to my body.” Several of the Moravian brethren with whom he served were injured or killed, one shot through the head, but the survivors 6 Andreas Albrecht to the Potsdam Brethren, August 7 “couldn’t think of anything but the Lamb and Blood.” 19, 1744, in “Die Pots- damer Soldatenbrüder,” Der Bruder-Bote (1866), Albrecht’s commander rejected his request to be released from military 66-67 [translated by service when the Second Silesian War ended in December 1745. Al- Stefan Harrigan]. brecht remained in Halle with his regiment until his request was fi nally 7 Andreas Albrecht to Un- granted in 1748: “the next day,” Albrecht stated, “I left for Herrnhaag.”8 known, copy, October 2, 1745, B.19.B.f.no.3, Unity The bonds that Albrecht formed during his years at war remained Archives, Herrnhut [here- important to him. He signed a 1752 letter to Zinzendorf as “former aft er, UA] [translated by Stefan Harrigan]. gunsmith for the Anhalt-Dessau Regiment in Halle,” and he remained close to one of his Soldatenbrüder, Carl Gottfried Rundt (1713-1764), 8 Albrecht Lebenslauf, MAB. aft er both had immigrated to America. Albrecht sang a composition 9 Andreas Albrecht to written by Rundt for the single brethren’s festival in Bethlehem in Nicholas Ludwig von Zinzendorf, May 2, 1752, 9 1755, and he penned a poem to celebrate Rundt’s birthday in 1763. R.14.A.30.90, UA [trans. Del-Louise Moyer]; Albrecht arrived in Herrnhaag in September 1748, joining the com- Andreas Albrecht to Carl Gottfried Rundt, May 30, munity at a moment of profound transformation (or crisis). The 1763, PP Carl Gottfried Moravian Church embraced a radical form of pietism that made other Rundt, MAB, 4; August 29, 1755, Bethlehem Single denominations uncomfortable. They focused their devotions on the Brethren’s Diary, MAB.

GORDON | ANDREAS ALBRECHT 115 bloody side-hole of Christ on the cross as the source of the grace that redeemed humankind; they believed men had female souls, which enabled them to imagine their love for Christ in very sensual imagery; and they insisted that believers experienced direct union with Christ not only during communion but also during sexual intercourse. Dur- ing the mid-1740s, the Herrnhaag single brothers, led by Zinzendorf’s only son, Christian Renatus (1727-1752), took these radical beliefs further than others had before.10 The single brothers at Herrnhaag contended that they had achieved perfection, a “state of blessed union with the divine”: they so embodied Christ, Christian Renatus stated, that their physical embraces were the embraces of Christ himself. He announced these lessons at a single brothers’ festival in Herrnhaag on May 2, 1748, and then repeated them to the men at nearby settlements: the sacrament of communion, in eff ect, was no longer necessary because perfected brothers could enjoy Christ “every day, every hour, and every moment.” From this point on, as archivist Paul Peucker describes, believers “could freely act out what they believed to be ways to actually experience and enjoy nuptial union with Christ.” In a festival on December 6, 1748, Christian Re- natus declared “all brothers to be sisters.” Having transformed into “maidens who could lie in the arms of the husband” [i.e., Christ], these single brothers felt that they were witnessing the start of a new era: each believer’s mystical marriage with Christ was not a future event to be longed for but was occurring in the immediate present. Reports from Herrnhaag told stories of illicit sexuality between single men and both single and married women. In February 1749, Count Zinzendorf issued a strong rebuke to the single brothers to reign in behaviors that his own teachings had inspired, and he summoned his 10 Paul Peucker, A Time of Sif- 11 ting: Mystical Marriage and the son to London. Christian Renatus left Herrnhaag on May 9, 1749. Crisis of Moravian Piety in the Eighteenth Century (University There is no reason to doubt that the community’s enthusiastic religious Park, PA, 2015). devotions resonated with Albrecht’s own spiritual feelings. He remained 11 Peucker, Time of Sift ing, 80, 84, in the Moravian community during the most extravagant excesses of the 114, 117; Craig D. Atwood, “Zinzendorf’s 1749 Reprimand “Sift ing Time.” His writings in the 1740s express this enthusiasm and to the Brüdergemeinde,” his writings in America suggest that he never abandoned it. Albrecht Transactions of the Moravian Historical Society 26 (1996): left the German lands for America with a large cohort of Herrnhaag 59-84. single brothers, who chose to abandon the settlement in early 1750 aft er

12 Catalog of Brethren who Trav- Gustav Friedrich (1715-1768), the new count of Ysenburg and Büdingen, eled on the Irene to America, the region in which Herrnhaag lay, demanded that each Moravian swear May 1750, in Hellmuth Erbe, Bethlehem, Pa.: Eine kommuni- loyalty to him and renounce Zinzendorf. Among the 80 single brothers stiche Herrnhuter-Kolonie des who traveled to Pennsylvania on the Moravian ship Irene was “Joh. Andr. 18. Jahrhunderts (Stuttgart, 1929), 153. Albrecht,” identiﬁ ed as a riﬂ e maker (ein Büchsener) from Brandenburg.12

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Bethlehem and the Communal Economy In June 1750, Andreas Albrecht arrived in Bethlehem, a Moravian community that was less than a decade old. But already it had about 15 buildings, including an enormous residence completed in 1748 for single men into which Albrecht moved, as well as nearly a dozen other industrial structures along the Monocacy Creek, including mills and a tannery. Three hundred men, women, and children lived in Bethlehem: 55 married couples, 12 widows and widowers, 118 single men, 50 single women, and 65 children of various ages. In the nearby communities of Nazareth, Gnadenthal, Christiansbrunn, Friedensthal, and Gnadenhütten — all of which were knit together with Bethlehem in a unifi ed and coordinated economy — another 320 people lived, 138 of whom populated a Native American congregation at Gnadenhütten. A 1752 list identifi es 36 diff erent trades in which these men and women worked. In some trades, several workers labored — there were three shoemakers, three silversmiths, and three blacksmiths, for instance — while in others only one individual practiced the craft : Albrecht was the only gunstocker. Bethlehem and the nearby Moravian settlements shared a communal economy: laborers received the necessaries of life (food, clothing, housing, medical care, and child care), rather than wages, in exchange for their work. Bethlehem’s authorities likened this arrangement to that of a family: “The Number [of settlers] at fi rst being but small, the Beginning diffi cult & in great Poverty, there was no other Way to subsist but by continuing as it were in one Family. The Method of Supporting it was, that every ones Labour and what he earned, was for the Use of all the Brethren united in this Work, and was laid out for their general Support.”13 Albrecht brought with him 500 German » in his account in Ledger C $ of the Diaconat at Bethle- guilders (about £82 in 1750, or approximately £11,500 or 17,500 in hem [January 1, 1749, to 2014),14 which the community banked for him in an account from November 1, 1755], 131; 15 Ledger D of the Diaconat which he could draw. at Bethlehem [November 1, 1755, to June 1, 1762], 111; Ledger E of the Dia- 13 “General Table,” 1752, 14 To calculate 2014 fi g- measuringworth.com), conat at Bethlehem [June BethCong 424, MAB; ures, I have relied on October 2015. 1, 1762, to May 31, 1771], see also “Specifi cation Lawrence H. Offi cer and 5; and by date in Journals of All Our Buildings and Samuel H. Williamson, 15 Albrecht appears among of the Diaconat in Bethle- Lands,” May 31, 1758, “Five Ways to Compute those to whom a debt is hem, vols. 2-6, MAB. Stan BethCong 565, MAB; the Relative Value of due “for Monies depos- Hollenbaugh mistook the “Essay on the State of a UK Pound Amount, ited with the Diaconat yearly credit to Albrecht the Economy,” March 26, 1270 to Present,” and without Interest.” The recorded in the Diacony 1763, UVC.X.143.a, Samuel H. Williamson, credit steadily declines Extracts as payment he re- UA. For the communal “Seven Ways to Com- (from £75.4.6 in 1752 to ceived for work (“Additional economy in Bethlehem, pute the Relative Value £22.10 in 1765) as Al- Information: Bethlehem see Erbe, Bethlehem; of a U.S. Dollar Amount, brecht withdrew small and Andreas Albrecht,” in Engel, Religion and 1774 to Present,” amounts every month or the Kentucky Rifl e Bulletin Profi t. MeasuringWorth (www. so, which can be traced » 20, no. 3 [2003]).

GORDON | ANDREAS ALBRECHT 117 Albrecht had decided to join the Moravian community at Herrnhaag for spiritual reasons. But this decision altered the trajectory of his career as a gunstocker. Albrecht probably practiced his trade while he lived in Herrnhaag’s Single Brethren’s House.16 Immigrating to Bethlehem in 1750, however, he left behind the economic opportunities that his training typically aff orded. He would never produce guns in large quantities for the military, nor would he produce ﬁ ne arms commissioned by aristocrats. Albrecht would never again serve as an armorer in a military unit, nor could he expect to operate a gun shop in a town that could attract local clients or government contracts. 16 For two other tradesmen at Herrnhaag around this time, None of these ways to make a living, to achieve comfort and perhaps Johann Valentine Haidt and Abraham Roentgen, see Vernon even wealth, would be available to him in Moravian Bethlehem. Al- H. Nelson, John Valentine brecht not only gave over his spiritual life to his Savior: he also gave Haidt: The Life of a Moravian Painter, ed. Paul Peucker over his economic life to others, to church leaders who selected the (Bethlehem, PA, 2012), and trade that church members would practice and where they would Lindsay Boynton, “The Moravian Brotherhood and practice it. He joined a church and community that disdained worldly the Migration of Furniture wealth, as a 1752 conference in London reminded artisans who had Makers in the Eighteenth Century,” Furniture History 29 been sent to Bethlehem: they must abandon the “principles of gain” (1993), 45-58, and Christopher and the eff ort to “becom[e] rich,” which would “[allow] the devil in . . . Gilbert and Tessa Murdoch, John Channon and Brass-Inlaid by a back door.” In January 1758, the Trade Conference at Fulneck Furniture, 1730-1760 (New in the United Kingdom affi rmed that “it cannot be a Principle of a Haven, 1994). Brother in Trade to become rich.” Bethlehem’s communal economy, 17 Erbe, Bethlehem, 80, 168; as Moravian Bishop Augustus Gottlieb Spangenberg (1704-1792) Minutes of the Trade Confer- ences, Fulneck Congregation, stated, ensured an equality of condition by appropriating the surplus January 12, 1758, quoted in wealth that the Moravians’ “diligence” generated: without such a Geoff rey Stead, The Moravian Settlement at Fulneck, 1742- system, “the danger to become rich might indeed be great.”17 Albrecht 1790 (Leeds, 1999), 93. embraced this system wholeheartedly. 18 July 31, 1759, Bethlehem Single Brethren’s Diary, MAB; Not everybody was content with this system. Several men who July 30, 1759, Journal of the Commission, Bethlehem “rebelled against the ways of the church and especially against the Digital History Project, http: Economy” were expelled from Bethlehem in July 1759. One of these //bdhp.moravian.edu/ community_records/ men, Johann Musch, a shoemaker, sued the church on the grounds meeting_minutes/journal/ that he should have been paid for his labor during the communal pe- 1759commjournal.html

(accessed October 13, 2015); riod.But, as those (Albrecht included) who had traveled from Europe “Declaration made by some with Musch testiﬁ ed at the trial in 1766, Musch had known before of Musche’s Fellow Travelers now living on the Nazareth emigrating that in Bethlehem’s “joint Oeconomie” an individual Tract,” in Box: Court Cases I, would receive “no Wages for his Labour, except his Clothes, Victuals & Musch Trial, MAB. Albrecht signed this declaration. Drink,” and a year aft er his arrival Musch had reaffi rmed his desire to Musch’s lawsuit went to stay “upon the Conditions known, of having no Wages.”18 Albrecht court in October 1766, and Albrecht traveled to Phila- himself expressed complete satisfaction with this communal house- delphia to testify with other keeping. In 1758, Bethlehem’s men reported their feelings about the brethren on behalf of the Moravian Church. Economy. Albrecht declared:

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Concerning the common Oeconomie, the ﬁ rst thing I must honestly say for my part is that I did not come to the Gemein [i.e., Moravian congregation] to achieve external advantages. I was sought out by the Savior and chosen and called for blessedness. When I heard of the Gemein and got to know it, I knew right away that that was where I belonged, that I would be safe there and in that way could ﬂ ee all the misery and danger to my soul. This outweighed everything for me. For I had decided that outside the Gemein I would be an unhappy person. This is the reason I said at the beginning that I had not come to the Gemein for the sake of external advantages and also for this reason have not thought much more about external matters for my person than always to desire that I would not be a burden to the Gemein. And for this reason the Oeconomie has never repelled me nor been against me and I have never considered how to get out of it because of any of the diffi culties that might be connected with it.19

Albrecht identiﬁ ed his priorities clearly: his soul, not “external advantages,” mattered, and his soul was safest when he lived in a Moravian community and not in the world. Albrecht knew that the spiritual, social, and economic system within which he performed all his labor in America would limit his capacities to concentrate on his profession, 19 Opinions of the Single let alone to expand his trade. Albrecht not only, as he wrote, submitted Brethren on The Economy, his will to his Savior; he also placed his talents in His hands. Church in Box: Termination of the Economy, 1758-1764, authorities determined the profession in which Albrecht worked, and MAB [trans. Roy Moravian Bethlehem needed him for other things. Shielded from the Ledbetter]. world by the Moravian Economy, Albrecht drew on his European train- 20 Gun-Stock Maker Account, in Book of our ing as a gunstocker only irregularly during the years that he would have Trades Earnings [1750-53] been most productive, his thirties and forties. in Box: General Diacony, Trades, MAB; December 31, 1750, December 31, There was limited work for a gunstocker in Moravian Bethlehem in 1751, December 29, the 1750s, except during the French and Indian War. In 1750, the 1752, in Journal of the $ Diaconat at Bethlehem, gunstocker earned only £0.3.0 (approximately £21 or 32 in 2014). no. 2, unpaginated. But the following year, with additional work mostly for Native 21 Distribution of the Breth- Americans, the trade earned £4.3.3½ in cash (as well as over £6 ren in Bethlehem in their worth of venison, deerskins, and butter, with which some custom- Various Trades and other Occupations, January 16, ers paid); in 1752, it earned £11.4.8 in cash (approximately £1,497 1759, Bethlehem Digital or $2,274 in 2014).20 A document that records the “distribution History Project, http:// bdhp.moravian.edu/ of trades” in Bethlehem in January 1759 identiﬁ ed seven tanners, community_records/ four nailsmiths, ten linen weavers, three glovemakers, eight shoe- business/trades/ catalogoft rades1.html (ac- makers, four bakers — and only one gunstocker, Albrecht.21 The cessed October 13, 2015).

GORDON | ANDREAS ALBRECHT 119 authorities that managed the uniﬁ ed economy that knit Bethlehem together with its surrounding communities regularly moved individuals into and out of trades as changing needs required. In the early years of the American Revolution, for instance, when Christian Oerter (1747-1777) supervised the Christiansbrunn gun shop, Moravian authorities moved the single brother Nathanael Hantsch (1749-1821) from Nazareth to help Oerter — who already had an apprentice, Jacob Loesch Jr. (1760-1821) — “in the gunstocker manufactory on account of much ordered work.”22 In the 1750s, however, Bethlehem was trying to ﬁ gure out what other work its gunstockers could do.

The community needed a gunstocker, even if he had only limited opportunities to practice his trade. A gunstocker was most valuable for the services he provided to the community’s neighbors, particularly the Native Americans who frequently came to Bethlehem. Indeed, the Native Americans who had invited Moravians to live among them oft en asked authorities to send somebody who could “serve the Indians . . . by keeping their guns repaired” in the words of Daniel Kliest (1716-1792), who replaced the blacksmith Anton Schmidt in Shamokin in 1753. Most of the earliest instances of gunsmithing work captured in Bethlehem’s ﬁ nancial ledgers note work done for Native Americans. Augustus owed £0.5.0 “to Stocking & Smith, [for] work on his Pistol” in January 1752, Mary Ann owed £0.13.0 (approximately £90 or $135 in 2014) for having a gun stocked for her son, Lucas, in February 1753, and Nicodemus owed £1.12.0 (approximately £225 $ 22 August 2, 1773, December or 340 in 2014) to the “Locksmith for stocking . . . a Gun” in March 27, 1775, Nazareth Diary, 1753. The leader of the Shawnees recalled that Andreas Albrecht had MAB; September 7, 1773, Nazareth and Upper Places “stocked his gun . . . to his complete satisfaction” in Bethlehem in Memorandum and Pricebook, 1752.23 Albrecht also stocked several guns for the ironmaster Richard Folder A735, Moravian His- torical Society, Nazareth, Pa. Shackleton in this period, so his work was not entirely for Native [hereaft er, MHS]. Hantsch Americans.24 had moved to Christiansb- runn on August 21, 1765, to learn a trade. He had moved 23 February 16, 1752, 17, 1749 to August 31, account, Ledger C, 319; to Nazareth (from Bethlehem) March 1, 1752, in [Single 1753]: unpaginated, Ledger D, 82, MAB: four months before authori- Brethren’s] House Con- MAB; Shamokin Diary, December 14, 1752 (for ties sent him again to Chris- ference, 1750-1752, April 18, 1754, MAB. A Wm. Macalister), March tiansbrunn. In October 1778, BethSB 8, MAB; Daniel group of Shawnees vis- 24, 1755 (for Fred. Klein), Hantsch was asked to leave Kliest to Nicholas Ludwig ited Bethlehem on July July 30, 1757 (“Stocking the Upper Places, encouraged von Zinzendorf, Septem- 10, 1752 (Bethlehem Di- &c. 2 guns”), September to travel to Lancaster ber 1, 1753, R.14.A.30, ary, MAB). 12, 1758 (for John Cains), to work with a gunsmith UA [trans. Del-Louise July 14, 1759 (Isaac there — probably Jacob Moyer]; January 30, 1752, 24 Shackleton had at least Wains), October 30, Dickert (August 14, 1775, February 19, 1753, March six guns stocked at Beth- 1759 (for Isaac Wains). Nazareth Diary; October 8, 25, 1753 in Journal lehem between 1752 and See corresponding dates 1778, Nazareth Single of the Diaconat at 1759, usually for other in Journal of the Diaconat Brethren’s Diary, MAB). Bethlehem, no. 2 [March men: Richard Shackleton at Bethlehem, Nos. 2-4.

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These fi nancial accounts make several things clear. First, Bethlehem’s accountant recorded Albrecht’s gunstocking work in the locksmith’s account, as when Nicodemus owed the “Locksmith for stocking . . . a Gun.” Bethlehem’s fi nancial journals and ledgers include a separate account for the “Gun-Stock Maker” only from 1750-1752. Aft er 1752, 25 Box: Extracts of Bethle- the Diacony Ledger D included a “Lock Smith & Gun Stock Maker” hem Accounts, 1747- 1765, MAB. account, which shrank to just “Locksmith” when the account was transferred to another page: but, even with this change of title, this 26 For more on this shift in thinking, which occurred account continued to include the gunstocker’s charges and credits. in the 1760s, see Scott Paul Gordon and Robert Indeed, Albrecht’s charges and credits appeared on the locksmith’s Paul Lienemann, “The accounts until 1762, several years aft er he had left Bethlehem. To Gunmaking Trade in Beth- lehem, Christiansbrunn, be sure, some work on guns may have been obscured in charges to and Nazareth: Oppor- the locksmith for work whose details simply weren’t specifi ed in the tunity and Constraint in Managed Moravian Econ- journals. It is impossible to know what portion of the locksmith’s omies, 1750–1800,” Jour- annual earnings noted in the Diaconat summaries — £76.6.6 from nal of Moravian History 16, no. 1 (2016): 1-44. 1756-57 (approximately £10,700 or $16,250 in 2014), £194.3.9½ from 1760-1761 (approximately £27,280 or $41,450 in 2014) — relate to 27 John Hughes to Timothy Horsfi eld, October 23-24, 25 work that the gunstocker performed. 1758, Box: Revolutionary War Documents, MAB. Second — and more important — the gunstocker’s labor served 28 The locksmith shop also those outside Bethlehem. Authorities did not (yet) conceive of the purchased guns between gunstocker as a craft sman who made products to sell to the general 1757 and 1761, presumably to repair them so 26 public or the surrounding community. Nor did the surrounding they could be used. See community look to Bethlehem as a source of rifl es, even aft er the Locksmith & Gun Stock Maker account for Stranger’s Store opened in 1753 to enable neighbors to buy some purchases of gun locks (December 12, 1755, April products that Bethlehem’s craft smen produced. The gunstocker 30, 1756, May 11, 1756, worked largely on demand (in economists’ terms, according to a June 30, 1756, October 18, 1756), of gun brasses “made-to-order” model): he would repair guns that were brought (December 15, 1755), and to Bethlehem and occasionally stock a rifl e, using salvaged or new of guns (September 30, 1757, December 21, 1761), locks or barrels, when a friend or neighbor requested it. There is no Ledger D, 7-8, 223, MAB. indication that he produced rifl es in anticipation of a future order or The Strangers’ Store purchased a half-dozen customer (a “made-to-stock” model). The gunstocker labored, that gun locks on September is, when somebody brought him work or requested a newly stocked 23, 1755 (Rees Meredith Bill, in Merchants Book rifl e. Albrecht oft en repaired or restocked a rifl e or fowler using [March 30, 1754-June 14, barrel, lock, and furniture provided by the customer. One Native 1757], in Box: General Diacony, Merchants, MAB) American who arrived at Bethlehem in October 1758, for instance, and George Klein purchased brought “both Lock & furniture” and needed a “new Stock”; another, three more in Philadelphia on August 21, 1758 (George who came with a “Barrell & Lock,” received a “plain Stock without Klein’s Account of furniture.”27 The “Locksmith and Gun Stocker” account includes Sundries paid & Bought in Philadelphia, in purchases of gun locks and gun brasses (cast brass buttplates or Merchants Book [June 14, trigger guards, for instance), which may have been used in newly 1757-August 11, 1759], in Box: General Diacony, stocked guns or as replacements in damaged guns.28 The volume Merchants, MAB).

GORDON | ANDREAS ALBRECHT 121 of his labor depended entirely on how much work those outside 29 January 12, 1752, February 16, 1752, March 1, 1752, Bethlehem brought him. in [Single Brethren’s] House Conference, 1750-1752, How did Bethlehem’s authorities decide to employ this European- BethSB 8, MAB. trained gunstocker? Albrecht began working in his trade soon aft er 30 He performed other services he arrived in Bethlehem in June 1750, performing the limited activity for the Bethlehem community: he traveled from time to time recorded in the community’s ledgers. Twice in early 1752, Bethle- to nearby Moravian commu- hem’s Single Brethren’s House Conference sent Albrecht looking nities such as Gnadenhütten or Meniolagomekah to deliver for “Sugar & Walnut Trees for Gun Stocks” or, the next month, for letters or the current Gemein “some Trees to make Gun-Stocks.”29 In 1755, however, Albrecht was Nachrichten, the newsletters that were read aloud in “assigned charge of the children,” teaching them music. He had been diff erent communities and helped knit together the involved in the community’s musical life from the moment he arrived far-fl ung Moravian commu- in Bethlehem.30 Albrecht played the traverse fl ute at Gnadenhütten nities: see March 30, 1753, Gnadenhütten Diary, MAB; in January 1752, and the next month at a birthday celebration of August 1, 1755, Bethlehem Nathanael Seidel (1718-1782), one of Bethlehem’s leaders, he played Single Brethren’s Diary, MAB. the harp. In June 1752, he traveled with three other musicians, including his friend Carl Gottfried Rundt (1713-1764), to celebrate the 31 June 13, 1752, December 17, 1752, Bethlehem Single completion of a new Moravian church in New York. A few months Brethren’s Diary, MAB. See later, in December, he provided music again at Christiansbrunn also Stewart Carter, “Trom- bone Ensembles of the Mora- to celebrate the third anniversary of the single brothers’ arrival at vian Brethren in America: that small settlement.31 The children he taught, “Brother Albrecht’s New Avenues for Research,” in Brass Scholarship in Review, little musicians,” oft en played at love feasts or the funerals of other ed. Stewart Carter (Hillsdale, children in the 1750s. In November 1756, “Albrecht with his music NY, 2006), 82-83n24. scholars performed” at an event at which nearly 200 boys and girls 32 September 22, 1758, March in the community’s schools were examined in their studies of the 11, 1759, Bethlehem Di- 32 ary, MAB [trans. Del-Louise previous year. Moyer]; November 1, 1756, Bethlehem Diary, quoted in “Extracts from the Diary of The December 1756 township tax list declares that Albrecht (along the Bethlehem Congregation, with many others) was “wholly employed” among the children.33 1756,” Penn Germania 2, no. 3 (1913): 92. Another man, Joseph Haberland (1726-1782), is identifi ed as the gunstocker at that time. Haberland, whose parents immigrated to 33 Bethlehem Township Tax Re- turn, December 9, 1756, Box: Saxony in 1727, arrived in Bethlehem in late 1753 on the Irene. He Administration Taxes, 1757- was identifi ed as a mason on the ship’s manifest and in Bethle- 1790, MAB. hem’s membership catalogs — but in two such catalogs the word 34 Membership Catalog, Beth- Maurer is scratched out and Büchsenschäft er written in its place.34 lehem and Christiansbrunn Single Brethren and Older Haberland was probably tapped to satisfy the relatively infrequent Boys, 1743-1755, BethSB gunstocking requests when the community assigned Albrecht to 47, MAB; Membership Catalog, Bethlehem Single the school. Brethren, 1756-1769, BethSB 48, MAB; John W. Jordan, The outbreak of the French and Indian War, however, altered this “Moravian Emigration to Pennsylvania, 1734-1765,” calculus. By late 1755, Bethlehem erected palisades and armed its Pennsylvania Magazine of men to protect itself. The Moravians “have established Military History and Biography 33, no. 2 (1909): 241. Watches in all their Places,” county offi cials reported to provincial

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authorities in summer 1757. Five men at Bethlehem kept an armed 35 Alterations in the Return of the United Brethren “Night Watch” and an additional “44 single men and 25 married . . . residing in Bethlehem,” have Arms,” while at Christiansbrunn “18 of the Singlemen have July 26, 1757, in Pennsyl- vania Archives, 1st ser., 3: arms” and joined “some of the Indians . . . in ranging Parties, for 242; Levering, History of several miles round the neighborhood . . . to see that no Indians are Bethlehem, 399. lurking about.” Albrecht and Haberland, however, did not produce 36 Dirck Brinkenhoff to Nicholas the “Arms and Ammunitions” with which the Moravians went to “a Garrison, December 18, 1755, R. 14.A.30, UA. very great Expense in providing themselves”: they were purchased in Another letter to Garrison New York.35 Bethlehem’s Moravians sent to New York “to purchase reported that church members from New York traveled some small arms & to borrow as many more as they could.” With to Bethlehem in late 1755 “with arms, Ammunition, “about 60 small arms, 7 or 8 Blunderbusses & 2 Wall-Pieces,” the &c. as many of the Brethren, merchant Dirck Brinkenhoff (1739-1764) added in December 1755, who name no Scruple, are 36 determin’d to defend Beth- “they are determined to make a vigorous Defence.” No discussion lehem &c. against such about producing arms at Bethlehem to meet this crisis seems to wicked Murderers.” He added that Bethlehem would have occurred. be grateful as “some in England would make the Provincial troops began to request gun repairs at Bethlehem as early Brethren a Present of some good Muskets, Powder, & as July 1756, and this circumstance must have required Haberland or Ball” (Henry van Vleck to Albrecht to devote more of their time to gunstocking. Many of these Nicholas Garrison, December 18, 1755, repairs — such as requests to mend gun locks for Captains Arndt’s R.14.A.30, UA). See also and Wetherhold’s companies — could have been satisfi ed by Bethle- December 20, 1755, Bethlehem Single 37 hem’s locksmith, Daniel Kliest, or his several assistants. But other Brethren’s Diary, MAB. requests, such as “stocking Sam. Evans his gun,” would have required 37 “The Accounts of the Albrecht’s or Haberland’s labor. Initially these requests were few, Moravian Brethren with the Commissioners of the but in the summer of 1757 they increased and authorities may have Province of Pennsylvania,” returned Albrecht, at least part time, to the gun shop. An August 1757 in Memorials of the Moravian Church, ed. charge from the joiner to the locksmith, however, hints at Albrecht’s William C. Reichel and Haberland’s unavailability or at more work than these men could (Philadelphia, 1870), 245. complete: why would the locksmith recruit the joiner for “Stocking 38 “The Accounts of the Mora- 2 Guns” if either of the gunstockers could have undertaken the job? vian Brethren” in Memorials, 315-16, 356-58; August 31, Albrecht was certainly back at work by March 1758, when he broke 1757, Journal of the Diaco- his arm in the shop.38 On the November 1758 provincial tax list, he nat at Bethlehem, no. 3 [September 1, 1753 to was again identifi ed as the “Gun Smith.”39 Albrecht appeared as a November 30, 1757]: 513; March 14, 1758, Bethlehem Büchsen-Schäft er, too, in a January 1759 list that identifi ed the trades Single Brethren’s Diary, for all of Bethlehem’s men. MAB. Haberland traveled frequently, visiting Philadel- phia in November 1757 and Albrecht was busy during wartime — but he performed his work touring country congrega- within the constraints of the Moravian communal economy. This tions in September 1758 before he left for Europe system limited Albrecht’s freedom to pursue opportunities that other on missionary work in gunsmiths recognized and seized during such confl icts. The career of October 1759. William Henry (1729-1786) of Lancaster, for instance, reveals what 39 Provincial Tax Return, an entrepreneurial gunsmith could accomplish. Henry served as an November 16, 1758, Box: Administration Taxes, armorer during the French and Indian War (as Albrecht had during 1757-1790, MAB.

GORDON | ANDREAS ALBRECHT 123 the Silesian War), accompanying Pennsylvania troops to repair their arms in 1756 and 1758. Henry leveraged the networks he formed in these years to catapult himself out of manual labor altogether by 1760. Two decades later, Jacob Dickert (1740-1822) realized the opportunity that wartime production off ered: he emerged from the Revolutionary War as the largest producer of arms in Lancaster County.40 Such transformative success was not, of course, the fate of every Pennsylvania gunsmith. But, for Albrecht, it was not even a possibility. He subordinated any desires he may have had for economic advancement, as we have seen, to the needs of his community (and his soul). He received no wages for this work and so could accumulate no capital: like all the other laborers at Bethlehem, he received food, clothing, lodging, and medical care when necessary. Moreover, he lived in a community that, under ordinary circumstances, had little need for a gunstocker: there was no internal market for his work. And so the work Albrecht performed in these war years did not advance him in his profession. Aft er the war ended in Pennsylvania in October 1758 with the Treaty of Easton and the need for a gunstocker in the 40 Scott Paul Gordon, “The Am- bitions of William Henry,” community diminished again, Albrecht probably spent most of his Pennsylvania Magazine of His- time teaching music to children. tory and Biography 136, no. 3 (2012): 253-84; idem, “Jacob Dickert,” in IE. Christiansbrunn and the Expansion of Gunmaking 41 Joseph Mortimer Levering, Hi- story of Bethlehem, Pennsylva- In December 1755, Moravian authorities had evacuated the girls’ nia, 1741-1892 (Bethlehem, school and nursery from Nazareth.41 With the restoration of peace PA, 1903), 329; Mabel Haller, “Early Moravian Education in in late 1758, they decided to move the boys’ school, 111 children in Pennsylvania,” Transactions of the Moravian Historical Society all, to Nazareth. Historian Joseph M. Levering wrote that a “proces- 15 (1953): 18-19. sion” of children and single brothers to establish Nazareth Hall in

42 Levering, History, 366; August June 1759 was “headed by the orchestra of boys with their instructor 30, 1759, Bethlehem Diary, Albrecht.” But if Albrecht led his music students to Nazareth Hall, MAB [trans. Paul Peucker], see also August 30, 1759, he returned to Bethlehem to live. It was only on August 30, 1759, Christiansbrunn Diary, MAB. that “Br. Albrecht moved up to Christiansbrunn to be closer to his Most sources, misled by Le- 42 vering, state that Albrecht music students.” moved from Bethlehem in June 1759. No description A small Moravian community composed nearly entirely of single men of the departure of children and single brothers to Naza- and boys learning trades, Christiansbrunn was about eight miles reth Hall mentions Albrecht: north of Bethlehem. In 1760, Albrecht was one of 42 single men, see June 6, 1759, Bethlehem 43 Single Brethren’s Diary, MAB; along with eight young men and 23 boys, who lived there. The de- June 6, 1759, Bethlehem Di- cision to move was not Albrecht’s; nor was the decision about what ary, MAB. trade he would practice. He moved, as the Bethlehem diary indicates, 43 August 29, 1760, Memora- not because of his profession as a gunstocker but because of his role bilia of Christiansbrunn and Nazareth Hall, MAB. as a music teacher: Christiansbrunn was close to Nazareth Hall,

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where Moravian boys were educated until they were apprenticed to a trade. As late as 1764, church offi cials at the American Provincial Synod in Bethlehem, reaffi rming that the “congregation still considers music a great benefi t to our liturgy” and that “our young people should profi t from it in the school,” identifi ed Albrecht and James Noble as the two “music docents.”44 The Christiansbrunn diary tracks Albrecht’s movements back and forth to Nazareth Hall to teach children or conduct services. Albrecht had been consecrated as an acolyte in Bethlehem on August 19, 1755; this recognized his lifetime commitment to service within the church and licensed him to assist the pastor in distributing elements of Holy Communion.45

Albrecht continued to work in Christiansbrunn as a gunstocker, when there was work. Bethlehem’s Gemein Conference described the arrangements in detail:

Albrecht has moved to Christiansbrunn, in part to instruct the children in music as he has [already] begun [to do] and [in part] to continue in gun making, however in such a way that the main thing will continue to be produced here. Now he has been given Peter Rice in order to teach him the trade.46

This memo indicates that Albrecht would work as a gunstocker in Christiansbrunn (and train a boy in the trade), but other work related to gun production would continue in Bethlehem. The barrel and 44 American Provincial Synod Report, April lock forging equipment, boring and riﬂ ing benches, and perhaps 26-29, 1764, MAB. other tools needed for some aspects of gun repair and production 45 August 19, 1755, Bethle- remained in Bethlehem until 1764. Albrecht himself probably traveled hem Single Brethren’s Di- ary, MAB; Faull, Moravian to Bethlehem to perform some of this work. Even aft er his move to Women’s Memoirs, 149. Christiansbrunn, Albrecht’s activity continued to appear on Bethle- 46 September 3, 1759, Min- hem’s books until the end of the communal economy in May 1762: utes of the Gemein Con- an October 1759 credit to the “Locksmith and Gun Stockmaker” for ference, MAB [trans. Paul Peucker]. “repairing a gun,” a January 1760 credit to the Locksmith for “Stock- ing a Gun,” a July 1760 charge to the Locksmith from the Tanner for 47 October 30, 1759, January 26, 1760, July 31, 1760, “2 lbs. Glue for Albrecht,” and a May 1762 credit to the Locksmith for in Journal of the Diaconat “Stocking a Gun in the best Manner” and “for Stocking two Pistols at Bethlehem, no. 4 [De- cember 1, 1757 to March 47 genteely & mounted in the best Manner.” It seems, all in all, a small 30, 1761]: 305, 338, 425, amount of work. The re-assignment to Albrecht of Peter Rice (b. MAB; May 3, 1762 in Journal of the Diaconat at 1743), who had been learning the tailoring trade in Christiansbrunn, Bethlehem, no. 5 [March indicates that no matter how little work there was for a gunstocker, 31, 1761 to June 29, 1763]: 244, MAB; see also authorities recognized the importance of training the next generation Ledger D, 223.

GORDON | ANDREAS ALBRECHT 125 to ensure that Moravian communities could count on these skills.48 When Rice left Albrecht aft er a short time, he received another student, Christian Oerter (1747-1777), who moved to Christiansbrunn on January 15, 1760, when he was 12 years old. Albrecht began to train Oerter soon aft er.

Albrecht’s relocation to Christiansbrunn meant that he remained in a communal economy even aft er authorities dismantled Bethlehem’s communal economy in 1762. Beginning in June 1762, Bethlehem’s craft smen earned wages and from these wages they had to purchase housing, food, clothing, and education for their children. The Bethlehem tradesmen alongside whom Albrecht had worked either purchased their businesses outright or became salaried employees of church-run businesses. Daniel Kliest, for instance, the locksmith with 48 For Rice, see Membership whom Albrecht had worked closely, purchased his business for £117 Catalog, Bethlehem Board- $ ing School, BethCong 485, (approximately £15,600 or 23,700 in 2014). He did not pay cash for MAB; James Henry, “Chris- this business: a debt was registered in the congregational accounts and tian’s Spring,” Transactions of the Moravian Historical Society carried over each year. Kliest was required to pay interest on this debt 1, no. 2 (1868): 74. Rice later each year: £6 for the stock and, separately, £5 for the use of the shop moved to Bethlehem (not from Christiansbrunn but from itself. Kliest also owed six pounds each year for the education of each of Gnadenthal) to study his children in the community school. In the seven years that followed organ-building with David Tannenberg (July 19, 1762, his purchase of the business, Kliest did not manage to reduce his debt, Nazareth Diary, MAB). which rose slightly to £122. The stability of this debt, however, reveals 49 Kliest accounts in Ledger C, that his income from this trade did manage to cover the interest due on 202; Ledger D, 233; Ledger E, his debt and the Kliest family’s yearly expenses.49 In Christiansbrunn, 366; see also Extract of the Bethlehem Accounts from Albrecht did not need to purchase his business and did not experience the June 1, 1761, to May any of the economic anxieties and uncertainties that participation in 31, 1762, in Box: Extracts of Bethlehem Accounts, 1747- a wage economy brought. Christiansbrunn’s communal economy 1765, MAB. Kliest paid off the entire debt incurred at the persisted until June 1771, and there Albrecht continued to perform his purchase of his shop by May varied forms of labor in exchange for the necessities of life. 31, 1771. For the transition from a communal to a wage economy, see Engel, Religion In May 1762, as church authorities prepared to dismantle Bethle- and Proﬁ t, 161-81. hem’s communal economy, inventories were produced of all the

50 The May 31, 1763, summary holdings at Bethlehem and the Upper Places. An inventory was taken of the value of each of the of the Christiansbrunn “gunstocking manufactory” or “gunstocking Upper Places notes, for the ﬁ rst time, that the sum for shop” (Büchsenschäft erey), as the document called the small operation Christiansbrunn “include[es] that Albrecht had supervised since he arrived there in 1759. The in- the Gunstockmaker,” since it was only during the previous ventory marked the ﬁ nancial separation of gunstocking activity from year (May 1762-May 1763) the locksmith shop, since the gunstocker’s activities remained on the that Albrecht’s activities were separated from Kliest’s ac- community’s ledgers while Kliest’s did not aft er his trade had been counts (Journal of the Diaconat privatized. But it did not mark any transformation of gunstocking at Bethlehem, no. 5 [May 31, 1763]: 328, MAB). activities.50 This May 1762 inventory reported 316 gunstock blanks

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(of walnut, maple, and birch), along with iron and brass wire, a few trigger guards and buttplates, and a small amount of steel.51 The large number of gunstock blanks were on hand because gunstockers would set aside logs of ﬁ ne wood whenever they were found, have them cut into proper-sized planks at the Christiansbrunn sawmill, and then leave these planks to cure and dry (which could take years).52

The minimal demand for the work of a gunstocker left Moravian 51 Inventory, Nazareth Stock, May 31, 1762, Box: Docu- authorities puzzled about what to do with another European-trained ments and Letters, MHS. gunstocker, Johann Valentine Beck (1731-1791), who arrived in Beth- This inventory is reproduced in part in Robert lehem on October 21, 1761. Beck “worked at [his] profession for a Lienemann, “Moravian Gun Making: Bethlehem while” in Bethlehem — perhaps releasing Albrecht from traveling to to Christian’s Spring,” in Bethlehem for some gunmaking activities for a time — and then, Beck Moravian Gun Making of the American Revolution recalled, he “went to Nazareth to serve the children in the boarding (Trappe, MD, 2010), 28. school [Anstalt].” Both Beck and Albrecht, living in Christiansbrunn, 52 W. C. Reichel states that worked primarily among children. While Beck would have had the Friedensthal’s mill was opportunity to work alongside Albrecht and his apprentice Oerter — busy cutting curly maple, “whose timber was coveted this would have been an impressive gathering of talent — authorities by the gunstock-maker” at treated this concentration of gunstockers not as an opportunity but as nearby Christiansbrunn, but he does not date this a problem: too many men in a trade for which there was little work. In comment or indicate March 1762, authorities proposed moving Beck from Christiansbrunn whether this is a fanciful remark or something he to Bethlehem to work with the children — and, at the same time, found in a diary (Friedensthal pondered “carrying on the gunstocking shop here [i.e., Bethlehem] in and Its Stockaded Mill: A Moravian Chronicle, 53 the future.” Beck, however, remained at Nazareth Hall with the chil- 1749-1767 [Nazareth, dren he taught.54 Such calculations about where to assign manpower PA, 1877], 20). within the coordinated economy subordinated individual desires 53 John Valentine Beck, and ambitions to the needs of the overall “family.” It was impossible Lebenslauf, Moravian Archives, Southern Prov- within the Moravian economic system to permit Beck, or Albrecht, ince, Winston-Salem, NC; March 22, 1762, Minutes to work in the profession in which he had trained (unless circum- of the Bethlehem Single stances changed and a full-time gunstocker became needed). Beck Brethren’s Conference, found work with the children “burdensome . . . in the beginning,” but BethSB 10, MAB. he accepted his assignments. Authorities continued to search for a 54 In June 1764, Valentine Beck was listed among place where Beck could “earn a living” as a gunstocker. In February single brothers at Naza- 1764, they assigned him to Lititz (to which he never moved, because reth Hall, while Albrecht was listed among single a replacement at Nazareth Hall could not be found), and later they brothers in Christiansb- sent him to Bethabara, North Carolina, where he arrived in October runn. In 1762, Albrecht and Beck were both in 55 1764 and set up business as a gunstocker. Christiansbrunn (BethSB 49, MAB). The most valuable aspect of Albrecht’s European training, to Moravian 55 February 21, 1764, March authorities, seems to have been his ability to train young boys as 12, 1764, Minutes of the gunstockers. When Peter Rice didn’t work out, as we have seen, Bethlehem Single Breth- ren’s Conference, BethSB they speedily assigned Oerter to Albrecht. But this arrangement, 10, MAB.

GORDON | ANDREAS ALBRECHT 127 too, met with diffi culties, which involved Albrecht’s expectations regarding the binding of his apprentices. When Oerter left Albrecht’s supervision aft er several years (for unknown reasons), church leaders quickly worked to restore the relationship. In July 1763, they asked Jeremias Denke, Christiansbrunn’s leader, to “help the boy Oerter return to his master Albrecht as soon as possible.” Albrecht didn’t “want to take him on,” they added, but would agree to do so “only if [Oerter’s] father will agree to bind him [verbinden], which [the father] will gladly do.”56 Apparently Oerter’s apprenticeship agreement did not conform to regulations that Moravian authorities had established in July 1762. Before this time, apprentices were not bound to their masters, so that, if a master chose to leave Bethlehem, he could not take an apprentice against his will. The new arrangements required all apprentices to be bound to a master by their parents.57 Related issues arose in 1771 when William Henry, the former gunsmith who was now a prominent Lancaster merchant, apprenticed his eldest son to Albrecht: “because [William Henry] intends to place his son in an apprenticeship with [Albrecht], we thought that it would be good to speak directly and honestly with Henry, so that he consider it carefully, so that we should not get the blame and Henry should not be off ended.” Here, too, authorities seem concerned about the conditions under which Albrecht would train Henry’s son. A third instance in which a committee reported on Albrecht taking an apprentice again emphasized legalities. On July 18, 1774, Lititz authorities recorded that the boy Georg Weiss “was bound out to our Br. Albrecht by means of a [Indenture] according to the law of the land in the presence of his father Mattheus Weiss and aft erwards, with a sincere admonition from the Collegio, given over to Br. Albrecht.”58

Why did authorities pressure Albrecht to accept Oerter back “as soon 56 July 5, 1763, Minutes of the as possible” in June 1763? Oerter ﬁ nally returned to Albrecht on Sep- Bethlehem Single Brethren’s Conference, BethSB 10, MAB tember 5, twelve days aft er construction had begun on a small gun [trans. Paul Peucker]. shop in Christiansbrunn.59 The decision to build this gunstocking shop

57 July 10, 1762, Minutes of the in Christiansbrunn likely stemmed from concerns about a new Indian Bethlehem Aufseher’s Col- War, the fi rst salvo of which had occurred on May 9, 1763, with Pontiac’s legium [trans. Jeannette Nor- fl eet], MAB. siege of Fort Detroit. By June 2, Native Americans had seized fi ve colonial forts, and Bethlehem’s authorities discussed the issue on July 1, 58 May 6, 1771, July 18, 1774, Minutes of the Lititz Aufseh- worrying that “the Indian war may become universal” and pledging ers’ Collegium, MAB [trans. to “make preparations so that we can be ready in case of emergency.” Anne Schmidt-Lange]. They directed the locksmith Kliest to “immediately begin working on 59 September 5, 1763, Memo- rifl es remaining here from the previous war, inspecting, cleaning, and randum and Pricebook, Folder A735, MHS. where necessary also repairing them,” and asked Timothy Horsfi eld to

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“make inquiries” in Philadelphia “as to whether we can obtain several guns from privateers.” It was at this moment that they began working to restore Oerter to Albrecht. Bethlehem’s authorities inventoried the guns on hand: 88 in all, 19 “provincial guns” stored in the Brethren’s House, 41 guns with Andreas Weber (steward of the boarding school), 11 with Kliest, 9 possessed by married men, and 8 possessed by single brothers. On August 10, authorities assigned people and guns to diff erent locations — the tannery, the waterworks, the stable, the tavern — » the Year 1761”), Ledger E, and established two companies that would have no fi xed location but 51; Extracts of the Bethle- would rather “rush to help where they are most needed.”60 Later that hem Accounts, 1763-1764, 9 (“Guns for Christians- month, construction began on the gunstocking shop in Christians- brunn”), Box: Extracts of brunn.61 The completed structure — a one-story, log building, 25.5 Bethlehem Accounts, 1747- 1765, MAB. For the transfer feet by 20 feet, with a small smithy (a surviving plan of a Moravian of equipment, see Receipt, gun shop is surely Christiansbrunn’s shop) — permitted work that Box: Upper Places: Misc. 62 Bills, 1762-1799 [MHS Albrecht could not have undertaken in Christiansbrunn before. On 52], MAB. These identical January 31, 1764, the locksmith shop in Bethlehem transferred tools, items show up the May 31, 1764 summary of charges including boring and rifl ing benches, to Christiansbrunn since the new from Kliest to Christiansb- gun shop had room for them. With this equipment and aft er setting runn (Journal of the Diaconat at Bethlehem, no. 6 [July 1, up a forge, a master could train his apprentice to produce every part 1773-August 25, 1766]: of a rifl e: to forge and fi nish barrels and locks, to cast mounts, and to 203) and in a March 1766 inventory of the furnishings stock up the complete arm. In November, Bethlehem’s authorities sold of the Christiansbrunn gun some guns to Christiansbrunn that they had purchased from overseas shop [Box: Upper Places: Misc. Inventories: Upper 63 in 1761; these were delivered to Albrecht. Places, 1762–1775 [MHS 39], MAB].

During the nearly three years that Albrecht supervised the new gun shop 64 Only one letter document in Christiansbrunn — he departed in November 1766 for an assignment this contract: William Henry to Andreas Busse back in Bethlehem — its activities changed. It began to produce new and C. G. Reichel, March rifl es for sale, and it expanded and diversifi ed its customer base. 9, 1801, Box: Nazareth Elders Conference, 1791- Production levels were likely minimal until the American Revolution, 1801, MAB. Oerter deliv- when, under Christian Oerter’s management, the shop was contracted ered 50 muskets by May 64 13, 1776 and the shop to provide 500 muskets to the new state of Pennsylvania. This shift to delivered 150 more mus- producing new rifl es and counting on a market for them is signifi cant — kets by October 1778: see Memorandum and Price- and it happened on Albrecht’s watch (though it is impossible to know book, Folder A735, MHS, and, for a more detailed re- 60 July 1, 1763, August 1, Roesser (1708-1771) “on March 31, 1766, Box: port of one charge listed in 1763, August 10, 1763, the aff airs of the craft s- Diacony Inventories, Naz- this volume, see “Account Minutes of the Bethle- men” (February 25, 1763, areth, 1760-1790 [MHS of 50 Guns delivered to hem Aufseher’s Collegium Lancaster Diary [trans. 54], MAB; Plan of a Gun Jacob Opp,” May 13, 1776, [trans. Jeannette Norfl eet], Roy Ledbetter]). It is pos- Shop, DP f.029.12, MAB. in Moravian Gun Making of MAB. sible that, even this early, the American Revolution, 9. Albrecht was consulting 63 December 21, 1761, Lock- For more on this period 61 In February 1763, aft er with Roesser about the smith Account, Ledger D, of the Christiansbrunn gun a visit to Philadelphia, plans for a new gun shop. 233; November 29, 1763, shop, see Gordon and Albrecht traveled to Lan- Christiansbrunn Account Lienemann, “The Gun- caster where he “spent 62 “Inventory of Buildings (“Guns &c. del. to Andr. making Trade in Bethle- most of his time” with built since 1760,” in Up- Albrecht, which Jon. Paul hem, Christiansbrunn, the gunsmith Mattheus per Places Inventory, Weiss had bought in » and Nazareth,” 29-36.

GORDON | ANDREAS ALBRECHT 129 whether he initiated it). Yearly inventories give a glimpse of the developing capacity of gun making in Christiansbrunn under Albrecht’s supervision. A June 1762 inventory reveals the tools and equipment that Albrecht possessed before the new building was raised: saws, 65 Christiansbrunn Inventory, June axes, planes, carving tools, hammers, drills and drill bits, and a large 1, 1762, Box: Nazareth Upper Places Agreements and In- bench with a screw vise — the tools of a woodworker or gunstocker, ventories, 1762-1800, MAB; as historian Robert Lienemann points out. A March 1766 inventory of Lienemann, “Moravian Gun Making,” 28; “In the gunstock- the “newly acquired” tools and equipment in the gunstocking shop ing factory, newly acquired,” in Upper Places Inventory, March includes, along with the riﬂ ing bench and boring wheel, the tools to 31, 1766, Box: Diacony Inven- furnish a smithy, including a bellows, an anvil, a sledgehammer, and tories, Nazareth, 1760-1790 65 [MHS 54], MAB. four pairs of tongs.

66 Yearly inventories show, for These inventories confi rm that Albrecht and Oerter began to make new instance, that in 1762 the shop possessed 316 gunstock rifl es in Christiansbrunn. The gun shop had between four and eight blanks; in 1763, 283 gun- fi nished or “new rifl es” in stock when inventories were taken in 1764, stock blanks; in 1764, 233 gunstock blanks; in 1765, 193 1765, and 1766. The term “new” designated a rifl e made in the shop: gunstock blanks; and in 1766, the same “new” rifl e might be counted in the stock for several years if it 173 gunstock blanks. This steady decline seems to sug- did not sell. (All “new” rifl es in these years were valued at fi ve pounds gest that Albrecht and Oerter [approximately £670 or $1,020 in 2014].)66 It is important to recognize used approximately 35 gunstock blanks yearly (with one that these fi gures reveal only how many rifl es were on hand at inventory year as many as 50, another as time, not how many rifl es Albrecht and Oerter had produced. The two few as 20). But, while the dif- ference of 20 gunstock blanks men may have produced and sold many more in a given year, or they between the 1764 and the may have produced four rifl es and sold none.67 These inventories make 1765 inventory might have resulted from the consumption no attempt to record all the work that the gunstockers undertook: they of 20 gunstock blanks, the shop was probably producing aim only to calculate the assets of the shop at the end of the fi scal year. additional gunstock blanks Even debts, which sometimes appeared in inventories, only hint at the in these years. If it produced 50 additional blanks, for in- work performed in a previous year, since they capture only the work that stance, the diff erence of 20 had not been paid for. In addition, debts were carried on inventories blanks from 1764 and 1765 would have resulted from the from year to year until they were discharged: in December 1759, Walker consumption of 70 gunstock Miller’s wife paid a debt for “Stocking & Repairing a Gun for her Hus- blanks. Indeed, in May 1767, 68 the shop possessed 240 gun- band in November 1755.” Only a journal or daybook of the gun shop stock blanks, which shows would reveal how much work and the sorts of work these men undertook that in the six months since Albrecht had departed Oerter in the 1760s. had produced at least 67 gunstock blanks. Albrecht’s gun shop, too, diversifi ed its clientele. Native Americans

67 In May 1764, the shop had continued to bring their rifl es to Christiansbrunn throughout the 4 “fi nished” rifl es; in May 1760s: in early January 1766, for instance, 13 Native Americans ar- 1765, 8 “new rifl es”; in May 1766, 6 “new rifl es”; and in rived in Christiansbrunn “because of the violent weather and because November 1766, when Oerter took the shop over, 4 “new ri- » May 31, 1765; Inventory that he turned over to are reproduced in part in fl es”: Gunstocking Factory of Diaconat Accounts of Oerter,” November 24, Lienemann, “Moravian Inventory, May 31, 1764, in Nazareth, May 31, 1766; 1766, in Box: Nazareth Gun Making,” 31-32. Box: Upper Places and Naza- “Andreas Albrecht’s Spec- Upper Places reth Agreements and Inven- ifi cation of the Finished Agreements and Inven- 68 Journal of the Diaconat at tories 1758-1770 [MHS 45], Work in the Gunmaking tories, 1762-1800, MAB. Bethlehem, no. 4 [Decem- MAB; Inventory, » Shop at Christiansbrunn Some of these inventories ber 13, 1759]: 322, MAB.

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they had some work for the gunstocker.”69 But two lists of outstanding debts to the Christiansbrunn gun shop reveal that, while Native Americans still constituted a signiﬁ cant percentage of the gun shop’s customers, the shop served white neighbors as much if not more than it served Native Americans. A 1767 list of outstanding debts recorded 29 individuals, 15 of whom seemed to be Native Americans. A 1769 list recorded 39 individuals, separated into 16 Native Americans and 23 whites. Most of the debts on both lists involved gun repair, although 10 of the 68 debts amounted to £4 or more and so could have been for a new riﬂ e.

It is impossible from surviving records to measure the amount of work that the Christiansbrunn gunstocking shop performed under Albrecht’s management: the quality of the work is also diffi cult to assess, since 69 January 2, 1766, Chris- none of the shop’s products have been positively identifi ed. Many rifl e tiansbrunn Diary [trans. Roy Ledbetter]. collectors believe that an impressively-carved rifl e — called the “Edward Marshall” rifl e — was produced by Albrecht in the 1750s or 1760s; the 70 Moravian Gun Making of the American Revolution, Moravian Historical Society possesses a near twin of this rifl e, more 64. A 1776 Oerter rifl e simply decorated but with an identical stock profi le. These attributions has been described as “the fi nest example of the Rev- arise, in large part, because several surviving signed and dated rifl es by olutionary period Pennsyl- Christian Oerter contain accomplished carvings on their stocks. One vania fl intlock rifl e extant” (The Picket-Post: A Record such rifl e, dated 1775 on the barrel and called the “griffi n” rifl e because of Patriotism 39 [Valley of the extraordinary creature carved behind the cheekpiece, is celebrated Forge Historical Society, 1962]: 18). For the Marshall as “the most elaborate of all the known Moravian guns.” Since Oerter rifl e, see George Shumway, Rifl es of Colonial America, must have learned his carving skills from Albrecht, the logic of attribu- 2 vols. (York, PA, 1980), tion goes, these earlier rifl es with similarly impressive carving are prob- 1:178-81; for the Moravian 70 Historical Society rifl e, see ably examples of Albrecht’s work. Such attributions, however, remain Kevin J. McDonald, “The speculative. Whether or not Albrecht produced the rifl es attributed to 1740 Whitefi eld House Museum and Its Early him, it certainly seems that Albrecht successfully transferred the skills Longrifl e,” Kentucky Rifl e he had mastered in the German lands to a new generation of American Association Bulletin 33, no. 2 (2012): 10-14; for gunsmiths. Albrecht could not, within the Moravian system, use those the griffi n rifl e, see skills to climb the economic ladder in early America, but he willingly Moravian Gun Making, 63- 75. For other rifl es with passed them on to others. It was to his apprentice Oerter that Albrecht engraved creatures, see turned over the Christiansbrunn gun shop on November 24, 1766.71 Patrick Hornberger and Joe Kindig, III, Masterpieces Albrecht had an assignment back in Bethlehem. of the American Longrifl e: The Joe Kindig, Jr. Collection (Trappe, MD, 2015); Bethlehem and Lititz: Economic Realities Moravian Gun Making, 51-63. Albrecht became a wage laborer for the fi rst time when he assumed the position of tavern keeper at the Sun Tavern (later the Sun Inn), 71 Andreas Albrecht’s Speci- fi cation, November 24, a large hostelry on the northern boundary of Bethlehem. Construc- 1766, Box: Nazareth Up- tion began in 1758, and guests were entertained there for the fi rst per Places Agreements and Inventories, 1762- time in September 1760. By August 1762, the inn contained three 1800, MAB.

GORDON | ANDREAS ALBRECHT 131 English and three German double bed-steads, as well as six single bed-steads. Its cellar contained 20 gallons of Madeira wine, 10 gallons of Tenerife wine, two quarter casks of white Lisbon wine, 109 gallons of Philadelphia rum, 64 gallons of West India rum, eight gallons of shrub, 40 gallons of cider-royal, four hogsheads of cider, and one barrel of beer. (The cellar stocked only a small amount of beer because the brewery in Christiansbrunn could quickly supply more: visitors consumed 38 barrels of beer at the Sun Inn in 1762.)72 In April 1766, seven months before Albrecht became innkeeper, Moravian engineers pumped running water to the tavern. Albrecht took over management of the tavern from Jasper Payne (1708-1779), who left to manage the congregational store in Lititz, on December 9, 1766. Albrecht’s yearly salary was £25 (approximately £2,870 or $4,360 in 2014), and his compensation included food.73

Albrecht could not be assigned to the Sun Tavern until he was married. “Brother Albrecht was proposed for our Tavern,” Bethlehem’s Elders’ Conference noted on October 9, 1766, “and to this purpose he should marry.” A marriage for Albrecht had been proposed in 1759 with a single sister from Philadelphia, Sally Price (1738-1769), but this union never occurred and Price remained a single sister until her death. In 1766, authorities ﬁ rst proposed Sister Magdalena Graff (b. 1742), but she declined. Aft er considering several other single sisters, they proposed Elizabeth Orth (1739-1830). Although Orth had been proposed a year before for another marriage, the need to ﬁ nd Albrecht a partner led authorities to consider her for him instead. On November 19, 1766, the two wed.

72 W. C. Reichel, The Old Sun The Albrechts served as tavern keepers for four-and-a-half years. It Inn, at Bethlehem, Pa., 1758, now the Sun Hotel: An Authen- was not an easy job. In December 1770, some farmers who lived in the tic History (Doylestown, PA, “drylands” between Bethlehem and Nazareth complained to Beth- 1876), 16. lehem’s authorities that Albrecht had treated them “very coarsely” 73 His salary for his fi rst partial when they tried to enter the tavern at night, and they threatened a year (the Moravian fi scal year began in May) was £10.16.0. lawsuit. An investigation revealed, however, that it was the farmers who “treated Brother Albrecht badly [ . . . throwing] him on the fl oor 74 December 10, 1770, Minutes of Bethlehem Elders’ Con- without provocation.” Such incidents were surely more common than ference [trans. Del-Louise records preserve. Albrecht had diffi culty speaking English, as was Moyer], MAB; Account of the Musch Trial, 25-27, in Box: evident at a trial in which he testifi ed in October 1766, which likely Court Cases I, Musch Trial, complicated his interactions with the many English speakers he dealt MAB; February 10, 1768, Journal of the Diaconat at with as a tavern keeper. In early 1768, Albrecht discontinued “the Bethlehem, no. 7 [August 25, German News Papers,” but continued to subscribe to the “English 1766-February 10, 1770]: 265, MAB. News Papers” at the Sun Tavern.74

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It is hardly surprising, as a Bethlehem committee discussed in Janu- ary 1771, that the Albrechts “repeatedly requested to be released from their tavern duties.” Albrecht was “of a mind to practice his profession [as a gunsmith] and to this end build a small house.” Albrecht’s propo- sition, however, puzzled authorities: he requested “that his work be so arranged as it was before in Christiansbrunn, including Brother Oerter, who has up to now been running the [gun]shop [in Christiansbrunn] as its master.” Authorities were sure that Oerter, who had become a master, would not “want to return to being an apprentice of Brother Albrecht’s.” So authorities rejected Albrecht’s request “that the tools for the gunsmith shop in Christiansbrunn, as well as young Brother Oerter, who has been serving as the master, be allocated to him.” But they considered an alternative possibility: Albrecht might be able to “practice his profession in Lititz,” a Moravian community about eight miles north of Lancaster, since “Brother William Henry in Lancaster wants to arrange plenty enough work for him from Pittsburgh.” In addition, “the tools of a gunsmith who died in Lancaster” — the Moravian Matthias Roesser had died on January 26, 1771 — “are supposed to be 75 January 28, 1771, March 16, 1771, Elders Confer- sold this month.” Albrecht thought the proposal had merit and visited ence, MAB. Lititz to investigate the possibilities.75 76 April 1771, Minutes of the Unity Administration In June 1771, the 53-year-old man, with his wife, left the tavern to Conference, 1770-1783 move to Lititz. Moravian authorities off ered him a £20 gratuity to [trans. Del-Louise Moyer], MAB; see also May 7, “ensure his total satisfaction and to prevent any future claims.” 1771 (“a Gratuity given They added that future tavern keepers should be paid £30 “plus a unto him by the Diaconat besides his Salary, being portion of the profi ts to encourage thrift iness and more attention to in full of all Demands to this day”), Journal of the detail,” which suggests some dissatisfaction with Albrecht’s tenure Diaconat at Bethlehem, at the Sun Tavern.76 Albrecht had lived in the Lehigh Valley, either no. 8 [February 12, 1770 to May 31, 1771]: 205, in Bethlehem or Christiansbrunn, for over twenty years. He was not MAB. only leaving behind a familiar region. He was also leaving behind 77 In anticipation of the dis- the economic security that he had enjoyed fi rst as a member of the mantling of the economy, communal economy and, later, as a waged employee of the church each individual signed a document witnessing to which he was devoted. In Lititz, he knew, he would “live and work that he or she “shall for for [him]self” for the fi rst time since he had left Europe.77 the future live & work for myself” and that “henceforth the Oeconomy hath In Lititz, Albrecht resumed his trade as a gunsmith. He moved into no Demand on me, nor the home of Joseph Ferdinand Bullitschek (1729-1801), a carpenter I on the Oeconomies of Bethlehem Nazareth or who had himself left Bethlehem in 1759 to help build the new com- elsewhere.” Samuel Saxon munity. Bullitschek married in 1762, and, until the family moved signed this particular testimony (in English) on to the new Moravian settlement at Bethabara in North Carolina in March 1, 1762, in Box: May 1771, raised his growing family in a stone home a block from Transition Period, Indi- vidual Agreements, 1762- the center of Moravian Lititz. The Albrechts moved from Bethlehem 1765, MAB.

GORDON | ANDREAS ALBRECHT 133 into this home,78 in which they would raise ﬁ ve children: Andrew (1770-1822), who worked as a tanner and nailsmith before serving as a state representative and state senator; John Henry (1772-1845), who became a gunsmith; Jacob (1775-18??), who worked as nailsmith and a blue dyer in Ephrata; Susanna Elizabeth (1778-1865), who married the widower Johann Philip Bachman, an organ-builder, in 1800; and Gottfried (1782-1835), who worked as a milliner.79

Albrecht’s activities in Lititz were as varied as they had been during his Bethlehem years. He continued to play music: Lititz membership catalogs listed Albrecht among the violinists. (The inventory of goods produced aft er Albrecht’s death lists “one Fiddle with a Case.”) He served on various committees or accepted assignments from them. The Lititz Aufseher’s Collegium gave Albrecht, along with David Tannenberg, the task of investigating whether Brother Andreas Horn 78 Both Albrecht’s lease and Bul- litscheck’s original 1762 lease sold “fake” rum to Henry Marck (the rum was “found to be quite can be found in Box: Leases good”). At another time, Albrecht — along with Brothers Christoph and Counterpart Leases, Lititz Moravian Church and Franke and George Geitner — made a three-hour visit to the black- Museum [hereaft er, LMC]. smith shop of John Henry Rauch, who had promised to improve

79 Membership Catalog, Lititz the venting of the smoke from his chimney: when they found that Single Brethren Young Men, the venting still left the shop vulnerable to ﬁ re, Rauch promised to Boys, and Little Boys, May 80 1791 [Andrew Albrecht and “regulate the emissions better.” These tasks, like his testimony in Jacob Albrecht]; Membership the Musch lawsuit in 1766, demonstrate that church authorities had Catalog, Lititz Single Brethren Young Men, Boys, and Little conﬁ dence that Albrecht would represent the community’s best interest Boys, March 1802 [Gottfried fairly and that he had earned the respect of his peers. Albrecht] in Box: Old Catalogs, LMC. See below for Henry Albrecht. Albrecht’s home probably had a workshop, as Robert Lienemann

80 September 15, 1772, November notes, since Bullitschek had been a carpenter or joiner. In addition 3, 1780, Minutes of the Lititz to his work as a gunstocker, Albrecht seems to have produced cof- Aufsehers’ Collegium [trans. 81 Anne Schmidt-Lange], MAB. fee mills, one of which — signed “A. A. 1772” — survives at Lititz. Albrecht quickly took on an apprentice, as we have seen: William 81 Lienemann, “Moravian Gun Making,” 35. For this coff ee Henry Jr. (1757-1821), who had been studying the piano in Lititz for mill, see Wendy A. Cooper several months, began as Albrecht’s apprentice in June 1771. His and Lisa Minardi, eds., Paint, Pattern, and People: Furniture second apprentice, the boy Georg Weiss (1758-1811), was “bound of Southeastern Pennsylvania, out” to Albrecht three years later on July 18, 1774. A third craft sman, 1725-1850 (Philadelphia, 2011), 50-5. Joseph Levering (1755-1797), was sent from Christiansbrunn to assist Albrecht on October 14, 1776.82 All these men — Henry, Weiss, 82 For Henry, see January 18, 1771, June 27, 1771, Lititz Levering — would later serve as masters of the Christiansbrunn gun Diary, MAB; for Weiss, see shop that Albrecht had established. July 18, 1774, Minutes of the Lititz Aufsehers’ Collegium [trans. Anne Schmidt-Lange], Most authorities date the sole surviving rifl e with Albrecht’s signa- MAB; for Levering, see ture on the barrel to these early years in Lititz. The rifl e, which has October 14, 1776, Nazareth Diary, MAB. some simple carving (double C-scrolls), resembles the profi le typical

134 GHI BULLETIN SUPPLEMENT 12 (2016) The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

of Lancaster County rifl es, a style that Albrecht presumably adopted aft er his move to Lititz. The barrel signature reads “A ALBRECHT.”83 Several other rifl es from the period have been attributed to Albrecht, one on the basis of a wooden patch box that closely resembles the sliding door on the 1772 coff ee mill. This rifl e has an unusual fi gure — a two-tailed dog with claw-footed legs — carved behind the cheek piece. A second rifl e, likely from the same period, also features a striking carving, this time of a lion with similar claw-feet. For some who have studied these rifl es, the unusual creatures on these two rifl es so resemble the griffi n on Oerter’s 1775 rifl e that they believe the craft sman who carved the lion and two-tailed dog must have been the man who taught young Christian Oerter: that is, Albrecht.84

Evidence suggests that Albrecht’s hopes of conducting a successful trade as a gunsmith at Lititz met with hard economic circumstances. He was training young gunsmiths; but few patronized his shop. He had moved to a region known for its accomplished gunsmiths, many of whom (Jacob Dickert, Peter Gonter (1751-1819), John Graeff (1751- 1804), George Rathvon (1747-1799), John Henry (1758-1811), Jacob Messersmith, George Frederick Fainot (1728-1817)) labored only a few miles away in Lancaster, while others (John Newcomer) worked elsewhere in Lancaster County. William Henry’s attempt to secure work for Albrecht from Pittsburgh must have failed. “Concerning Br. Albrecht’s lack of work,” the town’s overseers’ committee minutes of July 1772 record, “it was suggested that he should have his work advertised. Also, he should take a trip to visit a certain Lowry, 83 Shumway, Rifl es of Colonial who is an Indian trader and sells many guns, in order to introduce America, 1:198. The rifl e, aft er a restoration, can be himself.”85 The suggestion that Albrecht contact Alexander Lowrey seen in Roy F. Chandler and James B. Whisker, Be- (1725-1805) showed worldly sense on the part of Lititz’s authorities. hold the Longrifl e (Bedford, Albrecht had not had to worry about placing his product for nearly 1993), 44-45, and in Patrick Hornberger and twenty-fi ve years. His labor had been a service to others in the com- John Kolar, The Lancaster munal economies of Bethlehem and Christiansbrunn: he had never Long Rifl e (Trappe, MD, 2012), 10-11. worked for himself, dependent, as he was at Lititz, on a market for his products. 84 These rifl es are pictured in Moravian Gun Making, 50-61. Several membership catalogs produced at Lititz, while always identi- fying Albrecht’s trade as a gunstocker, reveal that in 1777 or 1778 he 85 July 19, 1772, Minutes of the Lititz Aufsehers’ 86 worked as a Pfeiff enkopfmacher, a pipe head maker. This detail from Collegium [trans. Anne the late 1770s suggests that it was Albrecht who had been involved Schmidt-Lange], MAB. in the extensive pipe head production out of the locksmith shop in 86 Membership Catalog, Bethlehem in the 1750s. In March 1756, for instance, the locksmith Lititz Congregation, July 1779, Box: Old Catalogs, supplied 4 dozen pipe heads to the Strangers’ Store. In March 1759, LMC.

GORDON | ANDREAS ALBRECHT 135 Bethlehem’s Potter “burn[ed] pipe heads” for the locksmith, who, in subsequent months, sold very large quantities of pipe heads to the Strangers’ Store: 400 in April 1759, 100 more in August, and 50 more in October.87 Soon aft er, Albrecht was assigned to “make the 87 Locksmith and Gunstock new machine to produce pipe heads” out of brass. The gun shop that Maker Account, Ledger D, 7; March 31, 1759, April 30, Albrecht turned over to Oerter in November 1766 contained a pipe 1759, in Journal of the Diaco- head press and several molds. The emendation to the Lititz mem- nat at Bethlehem, no. 4 [Au- gust 31, 1759, October 30, bership catalogs suggested that this trade constituted a signiﬁ cant 1759]:, 214, 226, 279, 306, MAB. portion of Albrecht’s activities, and he continued it beyond the 1770s: the inventory of goods produced aft er Albrecht’s death listed more 88 December 9, 1760, Diacony 88 Conference, BethCong 238, than 2,000 pipes (“ﬁ ft een Gross Smoak Pipes”). MAB; Inventory of the Stock and Tools of the Upper Places, It is possible that pipe head making was Albrecht’s primary occupa- March 31, 1766, Box: Dia- 89 cony Inventories, Nazareth, tion during these war years. By April 1777, Albrecht had lost all 1760-1790 [MHS 54], MAB; his apprentices. William Henry Jr. left in August 1776, having been Inventory, Andrew Albrecht, Inv 1802 F002 A, Lancaster banished from Lititz to the Christiansbrunn gun factory aft er sexual County Historical Society. improprieties got him in trouble. Levering left Albrecht less than six

89 Joseph Levering, who arrived months aft er he arrived in Lititz, returning to the Christiansbrunn to assist Albrecht in October gun shop on April 4, 1777. Georg Weiss left Lititz on April 10, 1777, 1776, presumably as a gun stocker, had been assigned and joined Henry, Levering, and the teenaged Jacob Loesch at the to make pipe-heads when he gun factory on August 27. Authorities recalled Weiss and Lever- was a boy: see November 9, 1767, Christiansbrunn Di- ing because Christian Oerter had been ill for months and unable to ary, MAB. work in the gun shop: William Henry Jr. was made its master in late 90 August 5-28, 1776, Lititz April. More generally, Moravian authorities were transferring men Single Brethren’s Diary, MAB; Lititz Diary, August 28, 1776, and boys to Albrecht’s old shop so it could meet the extraordinary April 10, 1777, MAB; demands of wartime.90 The small operation that Albrecht had begun September 2, 1776, Nazareth Diary; May 23, 1777, August 1, was now able, as Henry recalled twenty-fi ve years later, to put “four, 1780, Christiansbrunn Diary; fi ve, and sometime six” men to work at “fi nishing 500 stand of Arms April 28, 1777 (“the inventory 91 in the gun manufactory was for the State.” made and Wm. Henry jun. took over as master”), Upper Lancaster County gunsmiths were put under extreme pressure during Places Daybook, 1777-1800, Box: Upper Places, Account the early years of the Revolutionary War. In November 1775, the local Books [MHS 53], MAB. Henry Committee of Observation resolved that, if “any of the Gun-Smiths turned the gun shop over on July 31, 1780, to Jacob Loesch in the County of Lancaster . . . shall refuse to go to Work and Jr.; Loesch turned it over on make [ . . . the] Firelocks & Bayonets required for this County by the October 23, 1781 to Levering; Levering turned it over on March 17, 1785 to Weiss, » Gunmaking Shop Inven- to Bethlehem to work as February 11, 1789, who managed the gun shop tory, March 17, 1785, a clockmaker and in the April 22, 1789, Minutes until it closed and John Bonn, in Box: Nazareth Upper boys’ school, while of the Nazareth Aufseher’s the warden of Christiansb- Places Agreements and Levering, forbidden by Collegium, MAB. runn, assumed its outstand- Inventories, 1762-1800. Moravian authorities ing debts on April 28, 1789: Henry opened a gun shop to work as a gunsmith 91 Henry to Busse see Christiansbrunn Gunmak- in Nazareth in 1780, but while William Henry and Reichel, March 9, ing Shop Inventory, July 31, neither Weiss nor Levering was doing so in Nazareth, 1801, Box: Nazareth 1780, and October 23, 1781, would continue to work as took up the trade of tin- Elders Conference, and Christiansbrunn » gunsmiths. Weiss moved smith. For Levering, see MAB.

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Honorable House of Assembly,” these gunsmiths shall be deemed “Enemies to this Country,” their “Tools . . . shall be taken from them,” and they “shall not be permitted to carry on their Trades.”92 The Moravian community in Lititz felt particularly vulnerable because its members refused to serve in the voluntary militias organized in 1775 — or later, aft er March 1777, when Pennsylvania’s legislature made militia service compulsory. Nor did most Moravians take the oath of loyalty that Pennsylvania’s new government required in June 1777. These decisions resulted in substantial fi nes and, according to 92 November 10, 1775, Lan- caster Committee of Ob- law, could have extended to confi scation of property. On October 21, servation Minutes, Peter 1777, a troop of armed patriots forcibly removed 14 men, 10 single Force Collection, ser. 8D, item 86, Library of brothers and 4 married men, from Lititz, hauling them to Lancaster’s Congress. jail.93 Did Albrecht voluntarily remove himself from the profession 93 For the Revolution in in which he had been trained to avoid being compelled to produce Lititz, see Scott Paul weapons of war? A document dating to early 1776 indicates that Gordon, “Patriots and Neighbors: Pennsylvania Albrecht received 11 proved gun barrels — but delivered no muskets Moravians in the Ameri- to the local committee of observation. Substantial records survive of can Revolution,” Journal of Moravian History 12, no. 2 gun purchases by William Henry (by this time a chief procurement (2012): 111-42. offi cer for both state and continental governments) from Lancaster 94 [List of Muskets Fur- 94 County’s gunsmiths: Andreas Albrecht’s name does not appear at all. nished], Lancaster County Papers, 1724-1816, His- Aft er the war, Albrecht trained his son Henry as a gunsmith. Such torical Society of Pennsyl- vania. Albrecht wounded training would have begun in the mid-1780s, when he was thirteen or his hand in 1777 (“The fourteen. But Albrecht’s own economic uncertainty in his gunsmith wound on Brother Albrecht’s hand looks very trade seems to have led him to think twice about preparing his son as dangerous”: August 2, 1777, Lititz Diary, MAB), a gunsmith. When Henry Albrecht was sixteen, his father sent him an injury that could have Nazareth to work under his own former apprentice, William Henry. resulted from any sort of But the younger Albrecht did not arrive in Nazareth in March 1789 manual labor. to apprentice as a gunsmith: William Henry had been serving the 95 March 27, 1789, March 20, 1792, Nazareth Diary, Nazareth community as a “joiner” and Albrecht learned from Henry MAB; October 14, 1792, “the joiner’s trade,” or, as the notice in the church burial record states, April 4, 1816, Lititz Diary, MAB; Nazareth Church “that of cabinet-maker.” Aft er three years, in March 1792, Henry Register. For William Albrecht left Nazareth. He did not return directly to Lititz, traveling Henry as joiner, see Janu- ary 25, 1794 (“No more instead to Lancaster to work with Jacob Dickert, a fellow Moravian opportunity to learn car- and an established gunsmith with a large manufactory. Albrecht pentry with Brother Wil- liam Henry in Nazareth, as remained with Dickert for more than six months before returning he plans to make guns in to Lititz on October 14, 1792.95 Presumably working with his father, future”), Bethlehem Single Brethren’s Diary, MAB, each of these gunsmiths supplied a dozen rifl es to General Edward and Scott Paul Gordon, “‘A Hand in 1794. Henry Albrecht married outside the church in 1794 and Considerable Building on the Bushkill Creek’: soon left Lititz to work as a gunsmith for over a decade in western William Henry of Nazareth towns: Chambersburg (1796-1798) and Shippensburg (1798-1808) in at Jacobsburg,” Jacobsburg Record 37, no. 3 (2010): Pennsylvania and Gnadenhutten (1808-1809) in Ohio. He returned to 5-8.

GORDON | ANDREAS ALBRECHT 137 Lititz in 1809, perhaps living with his widowed mother until he built a home for his large family in 1813 outside the town of Lititz itself, about a half-mile from where his father had lived. He left Lititz in April 1816 to return to Nazareth.

By the time Henry Albrecht left his father’s Lititz gun shop in 1789 for Nazareth, Andreas Albrecht was nearly 71 years old. Only two men in Lititz, tanner John George Geitner (1715-1791) and warden Ferdinand Detmers (1718-1801), were older than he. Albrecht probably did not work as a gunsmith any longer. The memoir read at his funeral noted that some years before his death his “strength continually lessened and he eventually had to give up his craft .” The 1798 direct tax revealed that Albrecht’s property included an “Old Gunsmiths Shop” about 15 feet by 12 feet, made of logs — and that this shop had been “out of use these ten years or more.”96 By the turn of the century, he had grown deaf and had become so weak that he could no longer leave his house for religious services. Conﬁ ned to his home, Albrecht read the Bible and reports from other Moravian communities until blindness made this, too, impossible. His faith, which had drawn him to the Moravian Church in the German lands more than a half-century earlier, never left him, and conversations about the love of the Savior prompted him to “express himself quite vividly.” Albrecht made his will in March 1800. He celebrated his eighty-fourth birthday on April 2, 1802, and soon aft er, as his memoir concludes, he prepared to “go home.” He grew weaker, losing consciousness on April 16, and died on April 19, 1802, the second day of Easter.97

The inventory of the “Goods and Chattels, Rights and Credits of the 96 Bowers, Gunsmiths of Pen- personal Estate” of Andreas Albrecht contained, for the most part, Mar-Va, 11. It has long been thought that Albrecht was ordinary household items: ladles, forks, a teapot and six pairs of tea assigned to the boys’ school cups, a fi re shovel, a large pan, a walnut table, eight chairs, a large in Lititz from 1791-1793 (Haller, “Early Moravian Edu- arm chair, and a desk. Two “Silver Spoons,” four “Silver Tea Spoons,” cation in Pennsylvania,” 100), and a “Silver Watch with the Box” (valued at £3, or approximately but it was his son, Andreas $ Albrecht, Jr., who taught in £240 or 365 in 2014) were the only high-end items. Albrecht pos- this school (Andreas Albrecht, sessed two coff ee mills — perhaps of his own making — and, as we Jr., to John Gambold, October 4, 1793, Correspondence of have seen, “fi ft een Gross Smoak Pipes.” All these household goods, John Gambold, Drawer A-45, supplemented by a cow (valued at £4.10), were valued at about £29 Folder 7a, Moravian Archives- Winston Salem, North (approximately £2,310 or $3,509 in 2014). Albrecht also held seven Carolina). bonds that were valued at £508.10 (approximately £40,500 or $61,500 97 Albrecht Lebenslauf, MAB; in 2014). The inventory contained no hint whatsoever that, for much Lancaster Will Book H, 179- of his career in various Moravian settlements, Albrecht had been a 80, microfi lm, Lancaster County Historical Society. gunstocker.

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It is as a gunstocker that Albrecht has been remembered. But Albrecht brought his profession of gunstocker to a Moravian community that provided no market for, and had limited need for, the rifl es he had been trained to produce. In these early years, the gunstocker’s activity contributed more to supporting mission work than it did to the General Economy itself. Albrecht worked at his profession only irregularly. Shortly aft er Albrecht, along with a talented apprentice, began to produce rifl es for sale at a new gun shop in Christiansbrunn, Moravian authorities asked Albrecht to leave his shop and serve as a tavern keeper. When Albrecht did fi nally set up a workshop for himself in Lititz, he had trouble fi nding customers. Only one — relatively modest — rifl e survives with his signature, but it seems certain that Albrecht was, as historians and collectors believe, a “most accomplished craft sman.”98 His greatest legacy lies in the talent he trained, including Christian Oerter and William Henry Jr., to whom he passed on the skills that he had learned in the German lands, fi rst at peace and then at war.

Scott Paul Gordon, professor of English at Lehigh University, has written two books, The Power of the Passive Self in English Literature, 1640–1770 (Cambridge University Press, 2002) and The Practice of Quixotism: Postmodern Theory and Eighteenth-Century Women’s Writing (Palgrave Macmillan, 2006), and he has published numerous articles on religion, class, and patriotism in early America.

98 J. Wayne Heckert and Donald Vaughn, The Penn- sylvania-Kentucky Riﬂ e: A Lancaster Legend (Ephrata, PA, 1993), 63.

GORDON | ANDREAS ALBRECHT 139

The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

MATHILDE FRANZISKA ANNEKE (1817-1884): SOCIAL ENTREPRENEUR AND SUFFRAGETTE

Stephani Richards-Wilson

Introduction Mathilde Franziska Anneke (born April 3, 1817, in Hiddinghausen, Province of Westphalia, Kingdom of Prussia; died November 25, 1884, Milwaukee, WI, USA) was an entrepreneur, lecturer, educator, journalist, writer, and a newspaper editor. She was well educated and a free and independent thinker, interested in political and social reform on behalf of women in both the German lands and the United States. In addition to cultivating her professional, pedagogical, and literary endeavors, she was a wife and mother of seven children, three of whom survived to adulthood. She founded the fi rst women’s newspapers in the German lands and in the United States and is considered the most famous woman among the German “Forty- 1 Cora Lee Kluge, ed., Other Witnesses: An Anthology of 1 Eighters” who immigrated to the U.S. in the mid-nineteenth century. Literature of the German She displayed a lifelong commitment to equal rights for women and Americans, 1850-1914 (Madison, 2007), 83. The joined the emerging Women’s Rights Movement in the United States, “Forty-Eighters” were becoming their most popular speaker in the Midwest. During her comprised of thousands of German immigrants who lifetime, she was well known and held in high esteem by the early had participated in the leading feminists living in the northeast including Susan B. Anthony failed European revolutions of 1848/49 and af- (1820-1906) and Elizabeth Cady Stanton (1815-1902).2 Anneke also terwards relocated to the advocated for women’s education and established a girls’ school, United States. which gained a reputation for excellence among German-Americans 2 Michaela Bank, Women of Two Countries: German- in the Midwest and which she led for eighteen years until her death in American Women, Women’s Milwaukee, Wisconsin, in 1884. Throughout her life, she spoke and Rights, and Nativism 1848-1890 (New York, wrote on improving the lot of women and viewed the amelioration 2012), 1. of their social standing as a matter of human rights based on reason. 3 Her headstone is located She believed radical change to the political system would benefi t not in section 15, block 3, lot just women, but men as well. For this reason, she addressed both 2, grave 7 and the epitaph on her headstone reads, men and women in her lectures and writings and allowed boys to “We never knelt before attend her girls’ school. She did not live to see women gain the right false gods. We never shook in stormy weather. to vote in either Germany or the United States, but her eff orts to Instead we believed in the champion the rights, welfare, and betterment of women’s lives, as divinity whose love still builds tabernacles.” Trüm- refl ected in her newspapers and girls’ school challenged the existing mer und Epheu is a novella system and had an impact on society decades aft er her death. Anneke written by August Konrad Gustav Pfarrius (1800- died at the age of 67 and is buried alongside her second husband, 1884) and published in Fritz Anneke, in the Forest Home Cemetery in Milwaukee where many 1852. Pfarrius was a professor, writer, and popular other renowned German-American entrepreneurs are laid to rest.3 poet from the Rhineland.

RICHARDS-WILSON | MATHILDE FRANZISKA ANNEKE 141 Anneke did not reap great fi nancial rewards from her various entrepreneurial activities during her lifetime, including her newspapers and school, but fi nancial gain was less signifi cant to her than the social impact of her entrepreneurial activities. In this respect, An- neke can be viewed as a social entrepreneur. The concept was not recognized before the Social Entrepreneurship movement began in the 1980s when Bill Drayton founded Ashoka, an organization that promotes the notion that everyone can be a change-maker and make a positive diff erence in the world.4 Prior to Drayton’s activism, social entrepreneurs were oft en referred to as humanitarians, saints, or simply do-gooders, individuals who made a signifi cant impact by changing the way society approached social issues or viewed vulnerable populations that had been traditionally ignored, neglected, or intentionally disenfranchised. In the case of Anneke, she was an entrepreneur in the traditional, mainstream interpretation since she took signifi cant fi nancial risks in order to establish and operate newspapers and her girls’ school. However, she did not make great profi ts

4 “Ashoka: Innovators for the with these enterprises and struggled to keep them viable fi nancially. Public.” https://www.ashoka. In contrast, she succeeded as a social entrepreneur by impacting org/team/drayton (accessed March 2, 2014). Social entre- the lives of her readers, students, and women everywhere. Her ideas preneurs include: Susan B. and educational methods were radical at the time, but proved to be Anthony, Florence Night- ingale, Mohammed Yunus, sustainable and infl uential. These ideas and methods, rather than Fabio Rosa, Maria Montes- her specifi c business ventures, constitute her entrepreneurial legacy. sori, Saint Francis of Assisi, and John Muir, among many others. Family Background 5 Anneke began her memoirs when she turned fi ft y and Anneke was the oldest of twelve children born to devout Catholic translated “Levringhausen” as “House of the Larks.” She re- parents on her paternal grandfather’s picturesque estate of Oberle- membered it as her “paradise vringhausen near Blankenstein on the Ruhr River.5 Her parents, Karl never recaptured.” Charlotte L. Brancaforte, Mathilde Franziska Giesler and Elisabeth Hülswitt Giesler, were members of the local Anneke (Madison, 1998), 48. nobility, and her father’s godfather was prominent Prussian reformer See note 2. Heinrich Friedrich Karl Freiherr vom und zum Stein (1757-1831). As 6 Manfred Gebhardt, Mathilde a child, Anneke oft en visited Stein and his family on their estate of Franziska Anneke: Madame, 6 Soldat und Suff ragette (Berlin, Cappenberg. The Giesler family was well respected by the community 1988), 8. and Anneke’s concern for the societal wellbeing of others can be

7 “Westfälische Geschichte — traced to her grandfather, Franz Giesler. Aft er the Napoleonic wars Mathilde Franziska Anneke,” and ensuing years of hunger and privation, he alleviated suff ering http://www.lwl.org/ westfaelische-geschichte/ by ensuring that those living nearby had enough to eat. Anneke portal/Internet/ﬁ nde/ later described him as a “humanitarian man” (menschenfreundlichen langDatensatz.php?urlID= 7 598&url_tabelle=tab_ Mann). Anneke’s father was a tax assessor and king’s counselor person&url_zaehler_ (Domänenrat) in the town of Blankenstein where they lived as of blaettern=2 (accessed March 4, 2014). 1820. He was also a wealthy mine owner and was initially able to

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provide well for his family.8 In 1830, the family moved to Hattingen. (The village of Blankenstein is now part of Hattingen.) Born aft er Napoleon Bonaparte’s reign and defeat, Mathilde matured during the German Biedermeier period. She was nurtured and highly educated and showed an affi nity for literature, reading, and art at a young age. The comprehensive, liberal arts-based education she received was typical for girls from a higher social status.9 She drew, painted, played the piano, and received a well-rounded education that included Ger- man language and literature, science, and mathematics.10 Her parents sent her to the town school in Hattingen, but she also beneﬁ ted from private instruction until her father lost most of his fortune and the family’s social status declined.11 By 1835, he was facing bankruptcy. Failed investments in railroad stocks caused their standard of living to plummet and Mathilde, a dutiful daughter, agreed to marry Al- fred Philipp Ferdinand von Tabouillot, a wealthy wine merchant ten years her senior, who in 1836 arranged to pay off her father’s debt in exchange for her hand in marriage.12

Although she had enjoyed a happy, secure, and carefree childhood, the same cannot be said of her marriage, which she entered into at the age of nineteen. The marriage produced a daughter named 8 Fritz Anneke and Mathilde Johanna (Fanny). However, it was not a happy one and Mathilde suf- Franziska Anneke Papers. Wisconsin Historical Soci- fered from her husband’s abuse and excessive drinking. She became ety, Madison. Henceforth a prominent member of Prussian-Westphalian high society until she FA&MFA Papers. divorced Herr von Tabouillot and lost her social standing.13 Anneke 9 Gebhardt, Mathilde Fran- had left him a year aft er her wedding and soon aft er Fanny’s birth in ziska Anneke,12. 1837, but was not granted a divorce until 1843. The divorce process 10 Brancaforte, Mathilde lasted several years from 1838 until 1841 and it was determined that Franziska Anneke, 9. she was at fault for the failed marriage. She was, however, able to use 11 Martin Henkel and Rolf 14 Taubert, Das Weib im her given name again and received custody of her daughter. Divorce Conﬂ ict mit den Socialen at the time was still very unusual but was made possible by the Code Verhältnissen (Bochum, 1976), 9. Napoleon, the French civil code established in 1804 and adopted by many countries occupied by the French during the Napoleonic Wars.15 12 Ibid., 10.

Her prolonged divorce enlightened her to the unjust laws, debase- 13 Ibid. ment, and harsh treatment of married women, which contributed 14 “Mathilde Franziska to her lifelong battle for civil liberties and equal rights for women. Anneke,” http:// Once on her own, she supported herself and her infant daughter de.wikipedia.org/wiki/ Mathilde_Anneke by writing and contributing to women’s almanacs. Anneke’s early (accessed March 1, 2014). writings are conventional Biedermeier texts.16 She wrote religious 15 Henkel and Taubert, Das poetry and published her collection of prose and verse as Greetings Weib im Conﬂ ict, 11. from the Homeland (Heimatgruss). Although she found Catholic 16 Brancaforte, Mathilde Church doctrine unjust and argued that it, along with laws designed Franziska Anneke, 10.

RICHARDS-WILSON | MATHILDE FRANZISKA ANNEKE 143 to preserve men’s interests, forced women into subordination, she found consolation in her faith and published two prayer books: The Christian’s Joyous Gaze at the Heavenly Father (Des Christen freudiger Aufb lick zum himmlischen Vater) and The Lord is Present and Calls You (Der Meister ist da und rufet dich), the latter enthusiastically endorsed by Kaspar Maximilian Droste zu Vischerin, Bishop of Münster, who encouraged its use in parish schools.17

Anneke’s literary and journalistic activity in the German lands was diverse. Over the years, she penned poetic writings and novellas, wrote for various almanacs and journals such as Gartenlaube, and submitted articles and poems to newspapers such as the Kölnische Zeitung, Augsburger Allgemeine, Düsseldorfer Zeitung, and Mannheimer Abendzeitung.18 She also succeeded in convincing well-known contemporary writers to contribute to her women’s almanac (Damenalmanach), which appeared in 1842. She translated English-language novels into German and in 1844 completed a drama entitled Oithono or the Consecration of the Temple (Oithono, oder die Tempelweihe).19 As a professional writer, she went by the name “Mathilde Franziska” and became a well-known journalist.20 In 1846 she wrote a pamphlet entitled Woman in Confl ict with Social Conditions (Das Weib im Confl ict mit den socialen Verhältnissen), a passionate defense of women that is more refl ective of her later work. In this brochure, she defended Louise Astor, who, like An- 17 Albert B. Faust, “Mathilde Franziska Giesler-Anneke,” in neke, had been encouraged to marry a wealthy man and who had German-American Literature, later found herself in a “scandalous” position with regard to church ed. Don Tolzmann (Metuchen: 21 Scarecrow, 1977), 172-78, and state for pursuing a divorce. The publication of this pamphlet, here 174. Henkel and Taubert, Anneke’s fi rst major essay concerning the improvement of women’s Das Weib im Confl ict, 12. social and political standing, not only gained her a national reputa- 18 Rudolph A. Koss, Milwaukee tion, but also resulted in changes to laws in the German lands that (Milwaukee, 1871), under 22 “Deutsche Frauen-Zeitung,” dealt with marriage and divorce. http://books.google.com/ books?id=mD4VAAAAYAAJ &pg=PP1&dq=milwaukee+ rudolph+a+koss&hl=en &sa=X&ei=VCFkUsCbJtSyyg 19 Anneke’s drama appears Charles Fechter, an actor, Magazine of History 21 GIpYHgDA&ved=0CC8Q6A to have been infl uenced translated the play into (1937): 161. Brancaforte, EwAA#v=onepage&q=milwa by the structure of Johann English but it was never Mathilde Franziska ukee%20rudolph%20a%20 Wolfgang von Goethe’s performed on account Anneke, 10. koss&f=true. Anneke was still play entitled Torquato of Fechter’s early retire- living when this monograph Tasso. Brancaforte, Ma- ment. Faust, “Mathilde 21 Brancaforte, Mathilde was published. The Kölnische thilde Franziska Anneke, Franziska Giesler-Anneke,” Franziska Anneke, 11. Zeitung and the Augsburger 10. Her play was per- 175. Allgemeine Zeitung were the formed and received as a 22 Susan L. Piepke, Mathilde most prominent liberal news- success fi rst in Münster 20 Lillian Krueger, “Madame Franziska Anneke (1817- papers of that time. Henkel and later in Milwaukee Mathilde Franziska An- 1884): The Works and Life and Taubert, Das Weib im when it was staged in neke: An Early Wiscon- of a German-American Ac- Confl ict, 12. 1882 in honor of Anneke. sin Journalist,” Wisconsin tivist (New York, 2006), 7.

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In 1837, Anneke and her daughter moved to Wesel, a small garrison town in the Prussian Rhine Province, and two years later to Münster in Westphalia, where she sought intellectual stimulation and more journalistic opportunities. Her circle of friends included 23 the writer and poet Annette von Droste-Hülshoff (1797-1848). 23 Annette von Droste- She joined a debating society called the “Demokratischer Verein,” Hülshoff is best known for her novella “The Jew’s in which she met her second husband, Captain Friedrich “Fritz” Beech” (“Die Judenbuche”), Anneke, a former Prussian artillery offi cer, whom she married a murder mystery from 1842 that is never solved. on June 3, 1847.24 Fritz’s socialist beliefs had led him to be dis- Droste-Hülshoff provided missed from the military in 1845.25 Members of the debating club three poems for Anneke’s almanac, Products of the met on Mondays and not only discussed societal conditions and Red Earth (Westfälisches 26 Jahrbuch [1846] Produkte liberal ideas but also literature and art. Many were journalists der Rothen Erde). Piepke, who wrote for the Neue Rheinische Zeitung, edited by Karl Marx.27 Mathilde Franziska Mathilde and Fritz Anneke shared concerns regarding social jus- Anneke, 15. tice, freedom from oppression, and equality. They soon moved to 24 Kluge, Other Witnesses, 83. Cologne where Marx and others were politically active. Anneke had been the only woman to attend Marx’s debating club.28 Aft er 25 FA&MFA Papers. settling in Cologne, they established a newspaper for the working 26 Gebhardt, Mathilde Fran- class, farmers, and soldiers, Die Neue Kölnische Zeitung für Bürger, ziska Anneke, 34. 29 Bauern und Soldaten. They adopted the motto of the south Ger- 27 Henkel and Taubert, Das man democrats: “Prosperity, Freedom, Education for Everyone!” Weib im Confl ict, 13. 30 (“Wohlstand, Freiheit, Bildung für alle!”). The Annekes supported 28 Kluge, Other Witnesses, the establishment of a republic in the Rhineland and aft er Fritz 83. Bank, Women of Two Countries, 20. gave a “revolutionary speech” in Cologne before thousands of spectators, he was arrested on July 3, 1848. Later that month on 29 Erhard Kiehnbaum, Blieb Gesund, Mein Liebster Sohn July 21, Mathilde gave birth to their son Fritz.31 His birth certifi cate Fritz: Mathilde Franziska listed his father’s religion as Protestant, his mother’s as Catholic, Annekes Briefe an Friedrich Hammacher 1846-1849 and no religion for himself, which suggests Anneke did not nec- (Berlin, 2004), 20. essarily abandon her Catholic faith, but rather objected to how it 30 Gebhardt, Mathilde Fran- was practiced by church offi cials.32 The stress of her husband’s ziska Anneke, 69. situation, caring for a newborn, as well as the summer heat, con- 31 Brancaforte, Mathilde tributed to frequent illnesses during the summer of 1848. At the Franziska Anneke, 12. same time, Mathilde continued to edit the Annekes’ newspaper, 32 Gebhardt, Mathilde Fran- publishing the fi rst issue in September 1848 while Fritz was still ziska Anneke, 65. imprisoned. She expressed her support for the revolution in the 33 Krueger, “Madame newspaper and replaced the furniture and carpets in her parlor Mathilde Franziska An- neke,” 160. with a printing press while Fritz was awaiting trial for treason.33 When the authorities forced her to stop publishing the newspaper, 34 The newspaper stopped publication as of June 34 she founded her own. 1849 because the An- nekes went to fi ght in the In September 1848, Mathilde Anneke founded and edited the fi rst Ger- revolution. Brancaforte, Mathilde Franziska man newspaper for women, the Frauen-Zeitung in Cologne. At the time, Anneke, 13.

RICHARDS-WILSON | MATHILDE FRANZISKA ANNEKE 145 she was caring for eleven-year old Fanny and her newborn, Fritz. Given the strong inﬂ uence of the Catholic Church in Cologne with regard to

35 Henkel and Taubert, Das Weib children’s upbringing, she was careful not to antagonize the church im Confl ict, 51. hierarchy. She therefore dealt with questions and matters related to the 35 36 There is some debate as to education of children. Still, she was concerned with women’s equality whether Anneke’s women’s and intended to further their cause through her newspaper.36 Historian newspaper should be considered a feminist newspaper. Manfred Gebhardt maintains that her publication was not a feminist Maria Wagner refers to it as newspaper in the strictest sense and that Anneke’s purpose was to fi nd such, as does the Wisconsin Historical Society. “Mathilde another means by which to encourage both men and women to sup- Anneke,” Wisconsin Historical port the revolution once the Prussian authorities stopped publication Society, http://www.wisconsinhistory.org/topics/anneke/ of the Neue Kölnische Zeitung.37 He asserts that Anneke was a political (accessed August 10, 2013). Maria Wagner, Mathilde Fran- journalist and reported on the latest events, meetings, and arrests ziska Anneke in Selbstzeugnissen around Cologne. She also discussed the role of schools in society and und Dokumenten (Frankfurt am Main: Fischer, 1980), 10. churches’ infl uence in the school system. Historian Maria Wagner Henkel and Taubert, as well argues that the aim of Anneke’s newspaper was to promote women’s as Gebhardt consider it more 38 of a newspaper written by a rights, a stance which today would be characterized as feminist. woman. Anneke’s newspaper was short-lived and she soon had to abandon it

37 Gebhardt, Mathilde Franziska for her own personal safety. The second edition of the paper has been Anneke, 79-82. lost and Prussian authorities halted distribution of the ﬁ nal edition

38 Piepke takes up this debate before it could be delivered. between Gebhardt and Wag- ner in her book. She con- A few months later, she and Fritz fought alongside insurgents in cludes that the disagreement concerns the defi nition of the Baden in the 1848-1849 revolutions against royalist forces in the word “feminist,” which is a various German states. The Annekes challenged repressive regimes source of controversy even today. She decides to avoid and supported democracy and their vision of prosperity, liberty, and calling Anneke a feminist but education for all. Colonel Fritz Anneke had assisted with organizing commends her for her journalistic achievements. Piepke, artillery forces within the revolutionary army and retreated with them Mathilde Franziska Anneke, 19-20. to Baden aft er defeats in clashes with royalist forces. In May 1849, Mathilde joined Fritz on the battlefi eld, riding horseback as his or- 39 Kluge, Other Witnesses, 83. dinance offi cer or unarmed orderly (Ordonnanzoffi zier) during the day 40 Brancaforte, Mathilde Franziska and staying by his side at night until the end of the campaign.39 She Anneke, 15. also carried messages to and from command posts and sometimes 41 “The Making of Milwaukee,” rode long hours in dangerous territory, eliciting negative reactions Milwaukee Public Television, 40 http://www.themakingofmil- on account of her being a woman. Similar to many of the revolu- waukee.com/people/historical. tionaries, the Annekes were free thinkers and idealists.41 The “Forty- cfm (accessed November 1, 2013). Eighters” included educated professionals and progressive intellectuals from the middle class as well as many individuals from the working 42 Bank, Women of Two Coun- 42 tries, 15. class who were fi nancially destitute. Famed “Forty-Eighter” and German-American statesman, Carl Schurz (1829-1906), for example, 43 Schurz served as Anneke’s 43 clerk because he was unable served as Fritz Anneke’s adjutant in the Baden campaign. He later to ride on the battlefi eld. fought as a brigadier general in the Union Army in the American Henkel and Taubert, Das Weib im Confl ict, 126. Civil War and went on to become a Secretary of the Interior and the

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fi rst German-American U.S. senator.44 The German revolutions, however, were gradually suppressed and the insurgents were defeated by July 1849. The Annekes fl ed with their two children to France and Switzerland, and fi nally to the United States.45 They initially intended to establish a democratic newspaper in Switzerland, but because they had no personal capital or access to credit, they decided to immigrate to the United States.46 They never registered with the Swiss police and despite not having passports were able to board a freighter called the Robert Parker, which left Le Havre, France for the U.S. in October 1849.47 Aft er seven weeks at sea, they arrived in New York in mid-November of 1849 as political refugees. Despite off ers to stay in New York, Fritz Anneke’s cousin, Fritz Horn, persuaded him to relocate to Cedarburg, near Milwaukee, where he could establish a fi rm and work as a writer, commentator, or publicist.48 The winters in Wisconsin were long and cold and Mathilde arrived ill aft er the long trip. They soon became disappointed with Cedarburg 49 FA&MFA Papers. See the Biographical Notes in and decided to move to Milwaukee as soon as they could. Once they Commemoration of Fritz settled in Milwaukee in the spring of 1850, Mathilde initially admired Anneke and Mathilde Franziska Anneke as- the beauty of the surrounding area, but later complained about a lack sembled by Henriette M. of “really cultured associates.”49 Heinzen and Hertha An- neke Sanne in 1940, 27.

50 Faust, “Mathilde Franziska Business Development Giesler-Anneke,” 176. During this time and for As soon as the Annekes settled in Milwaukee, Mathilde Anneke the next three years, Fritz began traveling and speaking to large audiences about the German worked on a railroad in Illinois, worked brieﬂ y as revolutions, literary topics, and the necessity of improving women’s state librarian of Wiscon- 50 sin, gave riding lessons, social standing and rights. She continued these activities for the and lectured. FA&MFA next ten years. For example, on April 16, 1850, she delivered a talk Papers. entitled “Political Events and Poetry in Germany” at the Military Hall 51 FA&MFA Papers. See the in Milwaukee and later in 1859 she gave another speech on Thomas Biographical Notes in 51 Commemoration of Fritz Paine. In August 1850, she gave birth to her second son, Percy Anneke and Mathilde Shelley, named aft er the radical English Romantic poet Percy Bysshe Franziska Anneke assembled by Henriette M. Shelley (1792-1822) who was married to Mary Shelley (1797-1851), a Heinzen and Hertha An- feminist best known for her Gothic novel Frankenstein.52 neke Sanne in 1940, 33.

52 Henkel and Taubert, Das Weib im Confl ict, 132. 44 Krueger, “Madame law in Milwaukee 45 Krueger, “Madame Percy Shelley Anneke Mathilde Franziska and edited and wrote Mathilde Franziska (1850-1928) became a Anneke,” 160. Schurz for newspapers as Anneke,” 162. successful businessman shared other common well. His wife, Marga- and was an investor in interests with the rethe Meyer Schurz, 46 Henkel and Taubert, Das Fitger’s Brewery in Duluth, Annekes. He immigrated founded the fi rst Weib im Confl ict, 128. Minnesota. “Mathilde to the United States kindergarten in the Franziska Anneke,” http:// and moved to Watertown, United States in 47 Ibid., 130. de.wikipedia.org/wiki/ Wisconsin, in 1855. Watertown in Mathilde_Anneke (ac- He studied and practiced 1856. 48 Ibid. cessed March 1, 2014).

RICHARDS-WILSON | MATHILDE FRANZISKA ANNEKE 147 Milwaukee attracted political refugees in the late 1840s and early 1850s and had a large and active German population that continued to speak German both at home and in public. Seventy percent of the population spoke German and laws were printed in both English and German.53 The German cultural infl uence, including their sense of coziness or “Gemütlichkeit,” was so dominant in the social and intellectual life of Milwaukee that in the late 1840s, it was known as the German Athens of America, the cultural center of all things German.54 German civic societies, music clubs and choral societies, theaters, hunting clubs, churches, breweries, machine shops, bakeries, and presses fl ourished, one of which was instrumental in helping Anneke publish her fi rst newspaper in the U.S.55 In March 1852, Anneke founded the fi rst feminist newspaper published by a woman in the United States, Die Deutsche Frauen-Zeitung or the Ger- man Women’s Times. Anneke, a refugee with little personal capital or access to credit, was able to launch her newspaper with the assistance of the publisher and editor of the Der Volksfreund, who assumed the costs for typesetting, supplying paper for, and publishing the fi rst edition.56 When it appeared, another newspaper in Milwaukee Das Tägliche Banner welcomed its publication and ran the following on March 30, 1852:

The German Frauen-Zeitung edited by Frau Mathilde Fran- cisca Anneke, née Giesler, and issued at the offi ce of our Volksfreund has just made its friendly and promising ap- 53 Gebhardt, Mathilde Franziska Anneke, 265. pearance, and we hasten to heartily welcome the esteemed editor. The German Frauen-Zeitung will appear provision- 54 Kathleen Neils Conzen, Immi- $ grant Milwaukee 1836-1860: ally each month at the subscription price of 1. Individual Accommodation and Commu- numbers cost 10 cents. The ﬁ rst number at hand is well nity in a Frontier City (Cam- 57 bridge, 1976), 172. gotten up and edited with especial care.

55 Anneke wrote reviews of theatrical productions for the Later editions were published in the facilities of Milwaukee’s leading newspapers. FA&MFA Papers. newspaper, the Wisconsin Banner, where German-speaking women, See the Biographical Notes in Commemoration of Fritz An- including Anneke’s eldest daughter, Fanny Stoerger, assisted with neke and Mathilde Franziska the publication as compositors or typesetters. They set and printed Anneke assembled by Henriette M. Heinzen and Hertha the newspaper and worked alongside male staff . As editor and pub- Anneke Sanne in 1940, 33. lisher, Anneke focused on the intellectual and ethical elevation and

56 Koss, Milwaukee. equality of women with regard to their representation in social and political realms. In contrast to her earlier women’s newspaper pub- 57 Krueger, “Madame Mathilde Franziska Anneke,” 165. lished in the German lands, this one focused on themes related to the American women’s rights movement and reported on feminist 58 Gebhardt, Mathilde Franziska Anneke, 163. activities.58 She spent the rest of her life representing these ideals,

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speaking and writing with conviction.59 The motto of her newspaper included a quote by Friedrich von Sallet (1812-1843), which roughly translates as: “A woman is an unmoved, transparent sea, illumi- nated in its very depth by the eternal light, but whose surge has not tried, recognized, and felt itself in the driving and pressing labor, and self-motion, as a brook and stream and as a living force.”60 The message of her publication and the deliberate decision to hire women, » held in Seneca Falls, New however, contributed to the demise of her newspaper in Milwaukee. York in July 1848. Over three hundred women and men attended, including Anneke was a pioneering female publicist and journalist in a male- Elizabeth Cady Stanton, dominated industry. As soon as she had arrived in the United States, Lucretia Mott, and Frederick Douglass. The she had familiarized herself with Susan B. Anthony’s and Elizabeth National Women’s Hall Cady Stanton’s feminist writings. She had translated their articles of Fame, “We hold these truths to be self-evident and had tried, without success, to place them in German-language that all men and women newspapers, which had contributed to her desire to establish her are created equal,” http:// www.greatwomen.org/ 61 own. Some readers of her new newspaper viewed her with curios- about-the-hall/our-history ity or admiration, while others saw her as a “shameless interloper” (accessed November 9, 2013). Anneke later made 62 and questioned her motives. Her publication, which refl ected the contact with the leaders of social justice and humanitarian ideals of the 1848 German revolu- the suff ragist movement as well as with many of the tionaries, prompted male printers in Milwaukee to organize a local women’s groups that de- typographers union two months later on May 18, 1852.63 Fearful and veloped in various states since the fi rst convention. jealous of competition from women, the all-male union utilized social and economic pressure to safeguard members’ jobs. They 62 Krueger, “Madame Mathilde Franziska asked the supervisors of printing fi rms not to hire women and to Anneke,” 160. terminate those already employed, a maneuver that targeted Anneke 63 Conzen, Immigrant and her female staff .64 The printers attacked her newspaper and Milwaukee, 188. denigrated it as pious and petty, lacking substance and sophistica- 64 Krueger, “Madame tion or Bildung.65 Members of the German printers union saw Anneke Mathilde Franziska Anneke,” 166. as an “agitator” and demanded that “unauthorized interlopers” be fi red.66 Heated discussions followed and Anneke’s husband, Fritz, 65 Koss, Milwaukee. entered the fray, accusing the printers of hypocrisy and duplicity. 66 Conzen, Immigrant The printer’s union claimed they were maintaining the social world Milwaukee, 112. Koss, Milwaukee. order, die Weltordnung, when in fact they appeared only to support their version of order, one without women in the workforce.67 They 67 Krueger, “Madame Mathilde Franziska An- distanced themselves from women, denied them a sphere in which neke,” 166. The Catholic newspaper, Der Seebote, also maintained that An- neke’s newspaper was en- 59 Koss, Milwaukee. Wisconsin. Koss Movement,” in The dangering the world order included the original German Forty-Eighters and attacked her motives 60 Krueger, “Madame German quotation in his in the United States, ed. before the fi rst edition Mathilde Franziska An- monograph. Koss, Charlotte L. Brancaforte even appeared. Henkel neke,” 164-65. Krueger Milwaukee. (New York, 1989), 80. and Taubert, Das Weib attributes this translation The First American im Confl ict, 134. Krueger, to Professor William 61 Annette P. Bus, “Mathilde Women’s Rights “Madame Mathilde Huth of Whitewater, Anneke and the Suff rage Convention was » Franziska Anneke,” 165.

RICHARDS-WILSON | MATHILDE FRANZISKA ANNEKE 149 to work, and in the end helped to eliminate their means of earning an independent living.

In the face of the assault from the local union, Anneke attempted to sustain her entrepreneurial print venture by making it independent and, therefore, less susceptible to their pressure tactics. In the summer of 1852 she began a lecture tour to raise capital to establish a small, independent press. She hoped to secure more subscribers for her newspaper and create an organization of German women that would use her newspaper as its offi cial organ in order to generate greater revenue from the publication.68 She traveled to many large cities where typographical unions were present and spoke about the signiﬁ cance of her newspaper in hopes of securing more subscribers 68 Bus, “Mathilde Anneke,” 81. and greater funding. Speaking on behalf of women, she became one 69 Faust, “Mathilde Franziska of their most popular speakers, especially in cities with large Ger- Giesler-Anneke,” 176. man populations.69 It is noteworthy that she always included men 70 The Turners or Turnvereine in her plea for improving women’s social and political standing. Her were gymnastics clubs that had originated in Germany in talks were sponsored by local German organizations such as the the early nineteenth century to Turners (Turnvereine), Workers’ Unions (Arbeitervereine), and Free prepare young men mentally 70 and physically for resisting Thought Communities (Freie Gemeinden). The German-language Napoleon’s forces. They were press gave her full coverage wherever she spoke. On August 4, 1852, also freethinkers and held liberal political views. German the Wisconsin Banner reported: “Frau Mathilde F. Anneke left on a immigrants continued the tra- propaganda tour in the interest of her Frauen-Zeitung on last Friday. dition and established similar associations upon their arrival She will visit Detroit, Cleveland, Buff alo, New York, Philadelphia, in America. See for example Turner Hall & the Milwau- Pittsburgh, Wheeling, etc. May the public extend to her a friendly kee Turners, “History of the welcome everywhere. . .”71 Milwaukee Turners,” http:// www.milwaukeeturners.org/ about/history-of-milwaukee- While Anneke was away on her lecture tour, her mother and sisters turners (accessed Septem- watched her children in Milwaukee since Fritz was on his way to New ber 1, 2013). The Milwaukee Turners are Milwaukee’s old- York where he intended to establish a newspaper and relocate the est civic organization and was family.72 She raised the funds that she needed, however, much to the founded by August Willich in 1853. Willich went on to be- disappointment of Anneke’s readers, she decided to shut down her come a general in the Union print operations in Milwaukee aft er only seven months. She failed Army, as did at least seven other Turners. When the An- to establish the German women’s organization that she had hoped nekes ﬁ rst arrived in Mil- waukee, they joined the local Turners, sending their young son Percy to Willich’s Sun- » and physical capacities enlightenment, and 72 Wagner, Mathilde Fran- day Turner classes. Mathilde, to pursue strenuous in- democratic ideals. They ziska, 76. Anneke’s however, objected to the Turn- tellectual endeavors. opposed superstition unmarried sisters, ers’ attitudes regarding the Brancaforte, Mathilde and blind obedience and Johanna and Maria, woman’s role and societal po- Franziska Anneke, 19. advocated for rational had relocated to Mil- sition in which women were Thought Communities thinking. waukee with their mother, relegated to childrearing and or Freie Gemeinden in the as did Fritz Anneke’s kitchen work. She objected to United States consisted of 71 Krueger, “Madame brother Carl. Piepke, their assertion that women services and individuals Mathilde Franziska Mathilde Franziska lacked the mental » who pursued reason, Anneke,” 166. Anneke, 48.

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would be affi liated with her newspaper. The irony of the printers’ reaction to her employing women to produce her newspaper in Mil- waukee is that a decade later printers were forced to employ women due to a labor shortage during the Civil War. With male typographers volunteering for military service, local printers welcomed women into their print shops as compositors to keep operations running.73 In this sense, Anneke was ahead of her time, not only for demanding women’s right to vote and work, but also for recognizing the potential of women’s contributions particularly in times of crisis and war. The German printers’ union that had initially met periodically and had been instrumental in forcing her to cease publication in Milwaukee obtained permanent status at Local 23 of the National Typographi- cal Union in 1859, the fi rst labor organization in Milwaukee with a national affi liation.74 73 Krueger, “Madame Mathilde Franziska Anneke,” 164. Anneke moved her newspaper operations to the East Coast and began publishing her Frauen-Zeitung in New York City in October 1852. She 74 Conzen, Immigrant Milwaukee, 112. subsequently published it as a semi-monthly periodical in Jersey City and then later as a weekly in Newark until 1855 when ill health 75 Krueger, “Madame Mathilde Franziska 75 forced her to close operations. Before publication ended, she had Anneke,” 167. two thousand subscribers and her readership extended to Texas and 76 Faust, “Mathilde Franziska 76 Brazil. She oft en reported on the activities of the American women’s Giesler-Anneke,” 176. movement and in one edition, she wrote a fl attering article about Er- Brancaforte, Mathilde Franziska Anneke, 20-21. nestine Rose, the Polish-American multilingual suff ragette who oft en translated Anneke’s talks when she spoke to audiences that included 77 Anneke’s paper profi led Rose in the only extant is- English speakers.77 Anneke also assisted Fritz with the publication sue of her Frauenzeitung, of the Newarker Zeitung, the political daily that he had founded and which was published in New York as Number 7 on had fi nanced initially with the revenue Anneke had earned on her October 15, 1852. This 78 issue also includes short lecture tour. Both newspapers sold well and allowed the family to stories, philosophical es- lead a comfortable life.79 says, a sequel to a serial story, an article written by Anneke about a region in In September 1853, Anneke began attending suff rage conventions northern Germany, and a starting with a meeting held in New York City. Suff ragists primarily review of a new women’s drawing school. Branca- consisted of white, middle-class women from the Northeast who, forte, Mathilde Franziska like Anthony, Stanton, and Mott, had been active abolitionists and Anneke, 21. 80 social reformers. They, too, were referred to as “agitators.” Anneke 78 Brancaforte, Mathilde was the last speaker of the convention held in New York’s Broadway Franziska Anneke, 24. Kluge, Other Witnesses, Tabernacle and was heckled by an angry crowd outside and inside 83. Koss, Milwaukee. the hall. Although the loud mob attempted to disrupt the convention 79 Bank, Women of Two Coun- and distract Anneke, she continued in her native tongue and spoke tries, 70. about the diff erences between women in the New and Old Worlds, 80 Bus, “Mathilde Anneke,” about their similarities, and about the universal desire for women’s 80-81.

RICHARDS-WILSON | MATHILDE FRANZISKA ANNEKE 151 rights. Ernestine Rose who shared Anneke’s antireligious bent and radical vision of including women’s rights within the broader social reform movement translated her speech.81 Rose, however, felt marginalized within the movement of the 1850s, whereas Anneke was praised and well received among the other women. Anneke was perceived as a “power among the Germans” and strove to defend the feminist agenda within the German-American community.82 Yet, Anneke had many other interests, which she cultivated at the same time. While in Newark and later in Milwaukee, Anneke opened her home to guests and led them in discussions about art, literature, and music, referring to this circle as a Lesekabinett. These gatherings resembled European literary salons in which guests enjoyed the company of others interested in sociability, culture, and reﬁ ned conversation.83

In 1853, Fritz’s press published a limited run of Mathilde Anneke’s memoirs of the Baden campaign, entitled Memoiren einer Frau aus dem badisch-pfälzischen Feldzuge.84 The book begins with Anneke’s departure from Cologne on May 20, 1849. Some historians maintain that Anneke was the happiest between the years 1852 and 1858 when the family was together and ﬁ nancially secure. During these years, Mathilde gave birth to twin girls, Rosa and Irla. However, Rosa died within a few months and Irla died at age three.85 In 1855, Anneke gave birth to twin girls Hertha (later Anneke Sanne) and a second daughter named Irla. In 1858, tragedy and illness struck the family. Anneke’s 81 Bank, Women of Two Coun- tries, 69. three-year-old daughter, Hertha, and her eight-year-old son, Percy, came down with smallpox, a very painful and infectious disease 82 Ibid., 98. that spread through the city of Newark and within the Anneke fam- 83 Wagner, Mathilde Franziska, 128. ily. Fritz suff ered from a fever and Mathilde endured abscesses that led to headaches and a lame arm. The second Irla and ten-year-old 84 Faust, “Mathilde Franziska 86 Giesler-Anneke,” 176. son Fritz died of smallpox in March 1858. Fritz Sr. did not trust the new vaccines and had refused to allow his children to be vaccinated 85 Brancaforte, Mathilde Fran- ziska Anneke, 24. against the fatal disease. His stance and the subsequent death of their children drove a wedge between the couple that could not be 86 Gebhardt, Mathilde Franziska Anneke, 303. Brancaforte, fully reconciled. Mathilde Franziska Anneke, 24-25. Aft er burying four of their children in Newark, the family returned to

87 Gebhardt, Mathilde Franziska Milwaukee in May 1858, where Anneke’s mother, Elisabeth Hülswitt Anneke, 177. Anneke’s Giesler, was now permanently settled.87 Giesler did not have much mother died in December 1865 and had always been formal education but Anneke was inspired by her and admired her homesick for the German greatly.88 Relatives in Milwaukee off ered the Annekes the opportu- lands. Gebhardt, Mathilde Franziska Anneke, 267. nity to take over the operation of a café called the Lindemannsche Sommerwirtschaft in order to help the family ﬁ nancially. However, 88 Piepke, Mathilde Franziska Anneke, 11. Mathilde Anneke was still mourning the death of her children, and

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she and Fritz declined the off er. Instead, the Annekes sold various wares on commission for the next year until Fritz left for Europe.89 The family became close to Sherman and Mary Booth, who had invited them to stay in their home aft er a ﬂ ood had destroyed their apartment in Milwaukee.90 Sherman, editor of the Wisconsin Free Democrat, was an anti-slavery agitator and Mary became one of Mathilde’s closest friends. In 1859, Fritz Anneke left the family to work for various American publications as a correspondent in Italy, where he covered the Italian war for independence.91 Aft er Fritz’s departure for Europe, he and Mathilde rarely lived together and they went their separate ways when it came to politics and pursuing their own interests.92 They oft en lived apart for long periods of time, corresponding instead.93

Mathilde Anneke, Mary Booth, and their children went to join Fritz in Switzerland in 1860. However, he soon returned to the United 89 Gebhardt, Mathilde Fran- ziska Anneke, 178. States to serve as a colonel in the Union Army during the American Civil War (1861-1865).94 Mathilde and Mary remained in Switzerland 90 Brancaforte, Mathilde Franziska Anneke, 25. until 1865, possibly due to lack of funds to return immediately to the United States, and Mary translated many of Anneke’s poems 91 Bank, Women of Two Countries, 71. into English.95 The Swiss interlude was a productive period for An- neke and in 1863 she published The Haunted House in New York (Das 92 Henkel and Taubert, Das Weib im Conﬂ ict, 126. Geisterhaus in New York).96 Mathilde dealt with the topic of slavery and the war in her writings as well. The Annekes were Republicans 93 Wagner, Mathilde Fran- ziska, 11. and abolitionists. Many of the “Forty-Eighters” supported free, individualistic, and liberal thinking and opposed slavery and temperance 94 Kluge, Other Witnesses, 85. policies.97 Anneke wrote three novels about slavery and its horrors. 95 Faust, “Mathilde Franziska One was entitled Uhland in Texas and is about a German-American Giesler-Anneke,” 176. community that refuses to conform to a slave society. The town is Mary was married to Sherman Booth, an anti- called Uhland and is named aft er Anneke’s friend, the German libera- slavery agitator and editor tion poet and literary historian Ludwig Uhland (1787-1862). In 1862, of the Wisconsin Free Democrat. FA&MFA Papers. she published The Slave Auction (Die Sclaven-Auction) and The Death of the American Colonel Elmer Ellsworth (Der Tod des amerikanischen 96 This work was published in Jena. During this time, Oberst Elmer Ellsworth) in a journal called Didaskalia. The Broken she also wrote Als der Chains (Die gebrochenen Ketten) followed and was also published in Grossvater die Grossmutter nahm and Uhland in Texas. Switzerland in Der Bund in 1864. Milwaukee’s Sonntags-Blatt Herold Faust, “Mathilde Franziska or Sunday Herold published Die gebrochenen Ketten in their edition Giesler-Anneke,” 176. 98 dated July 9, 1864. She contributed to other publications as well 97 Bank, Women of Two including Belletristisches Journal, a periodical that published works Countries, 15. of ﬁ ction in New York, and the Illinois State Newspaper or Illinois 98 FA&MFA Papers. Staatszeitung.99 Her articles provided income for Anneke, Booth, and 99 Faust, “Mathilde Franziska their children, but also gave German-speaking readers an idea as Giesler-Anneke,” 176.

RICHARDS-WILSON | MATHILDE FRANZISKA ANNEKE 153 to what was happening in the United States. Living in Switzerland provided Anneke with the distance to reﬂ ect objectively on America and her experiences there in the 1850s.100 Another story off ered her readers a glimpse into her life near Lake Michigan in Wisconsin and the Native Americans living nearby. She published her story as Memo- ries of Lake Michigan (Erinnerungen vom Michigan-See) in 1864 in the Elberfelder Zeitung.101 When her close friend Mary Booth died in May 1865, Anneke was devastated and returned to Milwaukee, where she settled permanently and founded a school for girls the same year.102

In 1865, Anneke established an academy for girls called the Milwaukee Töchter Institut, which she led for eighteen years until her death. Because Anneke had written for the German- language newspapers in Milwaukee and was familiar with their readership, she knew that many middle-class, German-Americans would be interested in a school that off ered the same classical, liberal arts, and humanistic education taught in secondary schools (Gymnasien) in the German lands. Public schools in the United States at the time did not off er German-language instruction or German literature courses and tended to focus on rote memorization rather than developing critical thinking skills.103 Anneke recognized another problem with school choice in Milwaukee. In addition to off ering no German-language instruction, the public schools were overcrowded. Private schools, on the other hand, did offer German instruction but were run by German-Lutheran and German- Catholic organizations. Anneke, like her fellow, liberal “Forty-Eighters,” 100 Piepke, Mathilde Franziska rejected schools with religious affi liations and preferred those based Anneke, 102. upon secularism, bilingualism, and practical application of skills; 101 Kluge, Other Witnesses, 85. principles that became the hallmark of Anneke’s girls’ school.104 Milwaukee is located on the shores of Lake Michigan. Anneke’s academy was both a day and boarding school and was at- 102 Bank, Women of Two Coun- 105 tries, 71. tended by American and German girls. Having experienced oppression, injustice, and inequity much of her life, Anneke ensured that 103 Gebhardt, Mathilde Franziska Anneke, 265. her students became familiar with her ideals, most notably freedom and equality. There was a vast disparity in the education received by 104 Piepke, Mathilde Franziska Anneke, 114-115. boys and girls in both the German lands and in the United States and she believed that girls should beneﬁ t from a rigorous education 105 Anneke’s letterhead from 1865 included both English that prepared them to lead a productive and practical life outside of and German versions. The typical nineteenth-century women’s roles oriented toward “Kitchen, letterhead read, “Milwaukee 106 Töchter-Institut” and “Madam Church, and Children” (Küche, Kirche und Kinder). Although Anneke M.F. Anneke’s German, emphasized self-discipline, order, and punctuality, she treated the French and English Academy.” FA&MFA Papers. girls in the boarding school like members of the family and gave it a home-like atmosphere. Anneke was able to employ a maid for the 106 Gebhardt, Mathilde Franziska Anneke, 271. boarding school, which registered between six to nine boarders over

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the years.107 Tuition for the boarding school remained the same over the course of the eighteen years the school existed, namely $350.00 per year (approximately $5,000 in 2011$).108 Before her school closed, one of her students described its history as follows:

In 1865, shortly aft er her return from Switzerland, Madam M.F. Anneke together with a highly educated pedagogical lady, Caecilie Kapp, who had accompanied her abroad, founded a young ladies’ academy, having been requested to do so by many people in Milwaukee. This academy has since been called the Milwaukee Toechter Institut. About a year aft er the founding of the school, Miss Kapp accepted a call to teach in Vassar College, and Mrs. Anneke, laying aside her literary labors, continued the institute under many diffi culties, and has ever since devoted herself to ed- ucating her own sex. The academy is conducted in quite a free religious way, and educates not only pupils from Mil- waukee, but also young ladies from distant states. Her school maintains a high standard among educational institutions of its kind, pupils being instructed in all the important branches in the English, German and French languages. The greatest number of pupils has been ﬁ ft y, and the teachers employed are experienced educators.109

Initially and during the fi rst year of operation, Anneke complained of the working conditions at the school, which required her to handle both teaching and housekeeping. She worked hard, but found little satisfaction. Students ranged from fi ve to seventeen years of age, a range that remained consistent through the eighteen years in which 110 Brancaforte, Mathilde the school was in operation. Nineteen girls enrolled the fi rst year and Franziska Anneke, 34. aft er several years, Anneke allowed boys to attend fi rst-level classes.110 Twelve boys who had graduated from the En- gelmann English-Ger- man Academy also 107 FA&MFA Papers. See the calculations are based Mädchenerziehungsanstalt attended her school Biographical Notes in on the U.S. Consumer von Cäcilie Kapp. Geb- for “fi nishing” and to Commemoration of Fritz Price Index series hardt, Mathilde Franziska complete their studies. Anneke and Mathilde available on Measuring Anneke, 265. The highest Brancaforte, Mathilde Franziska Anneke as- Worth, http://www. enrollment was sixty-fi ve Franziska Anneke, 39. sembled by Henriette M. measuringworth.com/ students. FA&MFA Pa- FA&MFA Papers. See the Heinzen and Hertha uscompare/. pers. See the Biographi- Biographical Notes in Anneke Sanne in 1940, cal Notes in Commemo- Commemoration of Fritz 186. 109 Faust, “Mathilde ration of Fritz Anneke Anneke and Mathilde Franziska Giesler- and Mathilde Franziska Franziska Anneke as- 108 Brancaforte, Mathilde Anneke,” 177. The origi- Anneke assembled by sembled by Henriette M. Franziska Anneke, 38. nal name of the school Henriette M. Heinzen Heinzen and Anneke’s This and all subsequent was the Girls’ Educa- and Hertha Anneke daughter, Hertha Anneke purchasing power tional Institution or Sanne in 1940, 185. Sanne in 1940, 185.

RICHARDS-WILSON | MATHILDE FRANZISKA ANNEKE 155 Tuition for the fi rst class or “senior department” was 75 dollars per year, the second class or “intermediate department” cost 60 dollars per year, and the third class or “preparatory department” was 45 dollars.111 The charge for the “preparatory department, younger grade” was 30 dollars per year (approximately $427 in 2011dollars). During the fi rst few years in particular, Anneke struggled fi nancially because few families could pay their tuition in a timely manner. She was patient in encouraging parents to pay more regularly.112

Anneke persisted with her new entrepreneurial venture despite expe- riencing constant fi nancial diffi culties and even provided a horse and carriage to take students to and from school. Her expenses always exceeded her income and Fritz was, for the most part, unable to assist her. He lived elsewhere and had to pay for his own lodging on a small income, but did provide fi nancial assistance for extreme shortfalls or defi cits.113 Without his help and that of others, she would not have been able to keep the school open. Anneke therefore supplemented her earnings by giving private lessons and cultural lectures, writing newspaper articles, and selling life insurance, in addition to her regular work.114 One of the primary reasons for her fi nancial diffi culties was that the tuition fees were low and she did not establish an optimal payment schedule. Perhaps, she had little business acumen, or she considered developing the human potential of her students as the primary mission of her enterprise and making a profi t as a secondary motive. In this respect, she displayed the characteristics of a social entrepreneur focused on improving the lives of a population that traditionally had been undervalued and underestimated outside of the home, namely women. Anneke, however, was soon recognized 111 FA&MFA Papers. Gebhardt, as a successful teacher and her school gained a superior reputation Mathilde Franziska Anneke, 266. Approximately $1,000, among German-Americans in Milwaukee and the Midwest for its $855, and $641, respectively ethical, academic, and cultural standards. For this reason, and the in 2011 dollars. fact that they could aff ord the $350 tuition bill, many of Milwaukee’s 112 Brancaforte, Mathilde Franziska successful businessmen such as the Swiss-American distiller Jacob Anneke, 39. Nunnemacher and German-American tanner and business leader 113 Ibid., 39-40. Guido Pfi ster, sent their daughters to her school. Anneke’s support-

114 FA&MFA Papers. See the Bio- ers included women belonging to Milwaukee’s elite and affl uent graphical Notes in Commem- circles, such as the wives of the publishers W.W. Coleman and Moritz oration of Fritz Anneke and Mathilde Franziska Anneke Schoeffl er, the wife of Milwaukee Mayor Herman L. Page, and the assembled by Henriette M. wife of brewery owner Joseph Schlitz.115 Other parents included shop Heinzen and Hertha Anneke Sanne in 1940, 186. owners, attorneys, and merchants. Anneke used all the means and networks available to her to cover her expenses, and although she 115 Brancaforte, Mathilde Franziska Anneke, 40-41. was only able to pay her assistants and teachers small salaries, they

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continued to teach there because of the prestige associated with An- neke’s school.116 In the fall of 1865, she even hired a physics teacher, an atypical and progressive hire for a girls’ school at the time.117

The school year at Anneke’s academy ran 280 days with Saturdays and Sundays off . The academy was originally located at 269 Ninth Street, but by the spring of 1868 the school’s enrollment and infl u- ence had increased so much that Anneke moved the school to a larger building located at 472 Jeff erson Street where it remained until 1874. This structure was across from a courthouse and had three fl oors, three balconies, and eleven rooms. In the summer of 1868, several mothers of her students formed an aid society called “Levana” to assist Anneke with fundraising for the school.118 The word “Levana” has Latin origins (Levana was the ancient Roman goddess of education) and means “to preserve.” When the women formed the Levana Society, they had fi ft y members and elected Anneke as their president. Most of the members were from German families in Milwaukee and they made it their charge to raise enough money to build or buy a house so as to give the academy a permanent home. Their fi rst soiree brought in 120 dollars (approximately $2,000 in 2011$) profi t, which was used for teaching materials, maps, and books. In January 1875, another women’s group called the Hera Society also fundraised for Anneke. Hera (named for the Greek goddess of family and home) included eighty German women from Milwaukee and their goal was to give Anneke’s academy the prominence they believed it deserved by providing the fi nancial means to hire more assistants.119 Fundrais- ers included musical soirees, theatrical performances, and student recitals, among other activities. 116 Gebhardt, Mathilde Fran- ziska Anneke, 185.

Coursework at Anneke’s school included grammar, spelling, read- 117 Ibid., 266. ing, writing, German language and literature, arithmetic, geography, 118 FA&MFA Papers. See the history, and the natural sciences. Classes were taught in German Biographical Notes in and special subjects included French, English, Latin, music, and Commemoration of Fritz Anneke and Mathilde drawing. Anneke charged extra for music and drawing lessons, as Franziska Anneke as- well as for French instruction, and employed three to four teachers sembled by Henriette M. Heinzen and Hertha for the special subjects. They included well-known individuals who Anneke Sanne in 1940, were distinguished in their ﬁ elds, such as German-American painter 195.

Heinrich “Henry” Vianden (1814-1899) and musician Julius Klauser 119 Brancaforte, Mathilde (1854-1907), as well as piano teachers who were professional musi- Franziska Anneke, 40. Gebhardt, Mathilde Fran- cians. She employed both male and female instructors, approximately ziska Anneke, 272. half of which were of German descent.120 Emphasis was placed on the 120 Brancaforte, Mathilde liberal arts and the feminine or domestic arts such as needlework, Franziska Anneke, 37.

RICHARDS-WILSON | MATHILDE FRANZISKA ANNEKE 157 craft s, and cooking, subjects considered essential to the curriculum at other girls’ schools, were not emphasized at Anneke’s.121 Religious instruction, which was the primary subject taught in many schools at the time, was also missing from her curriculum.122

Anneke believed that the transfer of knowledge took place both inside and outside the classroom. Instruction typically began in the morning and lasted until 1:00 p.m. Free tutoring was off ered in the aft ernoon for students who were struggling academically. Others participated in music, needlework, or went on nature walks. Anneke took her students on strolls around Milwaukee, used nature as a resource, and included active games in their learning. She also taught and encouraged group work in which younger students learned from both the teacher and older students. She did not have benches in her school, but rather sat with her students at a large round table similar to the German university seminar system, a radical idea at the time in which both teacher and students were to be viewed as participants in the learning process.123

Anneke taught German, literature, geography, mythology, geology, writing, reading, and esthetics, in addition to handling the admin- 121 FA&MFA Papers. See the Bio- istrative management of the school.124 This included purchasing, graphical Notes in Commem- oration of Fritz Anneke and preparing, and storing food for the students’ meals, which were Mathilde Franziska Anneke known to be both healthy and economical. She and her staff would assembled by Henriette M. Heinzen and Hertha Anneke drive to the local slaughterhouse with horse and buggy, purchase Sanne in 1940, 43. meat in large quantities, and salt, pickle, and spice it upon return 122 Gebhardt, Mathilde Franziska to the school. Sauerkraut, vegetables, and butter were also stored in Anneke, 269. crocks in the cold cellar. Anneke’s eldest daughter, Fanny Stoerger, 123 Brancaforte, Mathilde Franziska taught “fancy work” at the school and became a favorite among the Anneke, 36-37. students.125 Anneke’s other daughter, Hertha, also worked there 124 FA&MFA Papers. See the Bio- later on. Anneke’s pedagogy consisted of some of the most advanced graphical Notes in Commem- oration of Fritz Anneke and educational techniques of the time and when she died almost two Mathilde Franziska Anneke decades later, the press had long since begun to consider her an assembled by Henriette M. 126 Heinzen and Hertha Anneke “arbiter” of culture. Literature, poetry, music, and art had always Sanne in 1940, 185. been of prime importance to her, and her students found her class

125 Ibid.,180. discussions about culture and literature, whether The Ring of the Nibelung or Heinrich Heine’s work, unforgettable.127 She did not 126 Brancaforte, Mathilde Franziska Anneke, 7. believe in report cards or examinations and implemented methods used by Friedrich Wilhelm August Froebel (1782-1852), the inﬂ uen- 127 Gebhardt, Mathilde Franziska Anneke, 297. Anneke referred tial German pedagogue who founded the kindergarten concept and to her literary activities as believed that each child was endowed with unique talents. Froebel her “gladsome art” or “meine fröhliche Kunst.” also believed that the student should engage in the life around her

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and Anneke followed the same principles. Many of her students went on to lead engaged and productive lives in politics and education.128

During this last phase of her life, Anneke participated in Milwaukee’s vibrant German-American community, establishing and leading the Radical-Club of Milwaukee in 1872 and becoming an active member of a free-thought community or Freie Gemeinde as of 1867.129 She wrote reviews of contemporary German theatrical performances and musical events and enjoyed seeing her play, Oithono, performed in the Milwau- kee Civic Theater in 1882, two years before she died on November 25, 1884. According to the Wisconsin Historical Society, her drama might very well be the only successful nineteenth-century German tragedy written by a woman and performed in both Germany and the United 128 For example, Clara 130 Thiele-Runge became States. Anneke not only ran her girls’ school for many years, but women’s state chair of also remained committed to the American women’s rights movement, the Progressive Party and a member of the board returning to the movement in 1869 with even more enthusiasm than of regents of the Univer- before her departure for Switzerland.131 She spoke at their convention in sity of Wisconsin, and Amalie Kremper founded Milwaukee in 1869 and participated as a delegate of the women’s move- a school in Chicago that ment to the United States Congress in 1870.132 Her last public appear- adhered to many of An- neke’s educational prin- ance at the women’s conventions was in Milwaukee in 1880. When she ciples and was in op- died four years later, numerous obituaries praising her accomplishments eration thirteen years. Brancaforte, Mathilde appeared in the German- and English-language press, both in the Franziska Anneke, 44. Midwest and on the East Coast. The Illinois Staatszeitung described her 129 Bank, Women of Two as one of the most signiﬁ cant German and German-American women Countries, 16-17. Those and emphasized that the German-American press should be proud of who favored a “radical” democracy supported her. She had served them well, despite the fact that few in the German- women’s rights as part of American community shared her radical views about women’s rights. an egalitarian society. Her concern for human rights and humanity were noble.133 130 “Mathilde Anneke,” Wisconsin Historical Society, http://www. As for Fritz Anneke, he survived the German revolutions of 1848 wisconsinhistory.org/ and the American Civil War only to die in a strange twist of fate on topics/anneke (accessed November 1, 2013). December 6, 1872. During the Reconstruction years, he had worked as a journalist in St. Louis and Chicago. He had been an editor and 131 Bus, “Mathilde Anneke,” 84. translator for the Anzeiger and other newspapers in St. Louis and wrote for the Illinois Staatszeitung. In 1872, he was in Chicago work- 132 Gebhardt, Mathilde Franziska Anneke, 303. ing as a chief offi cer for the Deutsche Gesellschaft , an agency that aided German immigrants, when he fell through a defective elevated 133 Ibid., 298. 134 sidewalk on a windy night and died instantly. 134 Bank, Women of Two Countries, 71. FA&MFA Papers. One hour af- Social Status ter authorities removed his body, another man Anneke’s status varied depending on her life’s circumstances and the named John O’Hara fell to his death at the same perspective of diff erent communities to which she belonged, such as spot.

RICHARDS-WILSON | MATHILDE FRANZISKA ANNEKE 159 the local Milwaukee press who initially saw her as an “agitator,” the German-American population who questioned her partnering with nativist suff ragists, and women’s rights activists who thought highly of her and sought her assistance in furthering their cause. She was politically engaged in her native land and continued to participate in public and political spheres once she arrived in America. As a young, slim, and tall woman, she was described as beautiful. As she matured in years and aft er the birth of her children, she assumed a more matronly fi gure and displayed a “majestic and impressive presence.”135 She welcomed guests to her home and cultivated relationships with other women through transatlantic correspondence, journalistic publications, and advocacy for radical social change. Despite living a disrupted and unsettled life, she remained industrious, engaged, and productive until her death. Her prolonged divorce from her fi rst husband and custody battle over their daughter, frustra- tions with the patriarchal institutions such as the Catholic Church and German state, and lifelong struggle to make a living altered her perspectives and prompted her to publish her political statements on behalf of all women.136 She argued that women were due equal suff rage rights based on reason. The failed revolutions of 1848/49 played a major role in her decision to fl ee for the New World with her second husband.

Anneke, a leading feminist and social reformer of her time, is oft en overshadowed by native-born contemporaries such as Anthony and Stanton with whom she closely collaborated and was loyal friends.137 Today, her name and entrepreneurial eff orts as the editor and founder of the ﬁ rst feminist newspaper in the United States are for the most part unknown because her publication was printed in the German language and much of the secondary literature about her is in Ger- man. Writing in 1918, Albert B. Faust celebrated her accomplishments and published the following in the German-American Annals:

135 Krueger, “Madame Mathilde At the present time, when the legislature of every state and Franziska Anneke,” 163. in fact, every home throughout the country is concerned

136 Bus, “Mathilde Anneke,” with the question of equal political rights for women, it is 79-82. ﬁ tting to call to memory the career of Mathilde Giesler-Anneke,

137 The two other prominent for she belonged to a small group of pioneers in the wom- German-American women an’s suff rage movement at its very beginnings, about the involved with the women’s rights movement were Clara middle of the last century. Susan B. Anthony mentions her Neymann and Mathilde repeatedly as her faithful colleague, who always untir- Wendt. Bank, Women of Two Countries, 14. ingly responded to the call, year aft er year, in the unequal

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struggle for woman’s rights, and even twenty years aft er the death of Mathilde Anneke recalled the services of her co-worker.138

Faust’s complimentary portrayal of Anneke provides a context and basis for comparison on several levels. He recognized her as a German-American woman who made noble contributions to the United States. He also compared her to other German-born women who were talented writers, recognizing that she appeared to lack the business acumen that made her German-American contemporary, Anna Behr Ottendorfer (1815-1884), a successful journalist and philanthropist. (Ottendorfer helped make the New Yorker Staats-Zeitung a major newspaper.) He argued that Anneke was as skilled as Therese Albertine Luise von Jakob-Robinson, who went by the name Talvj, (1797-1870), and Marie Hansen Taylor (1829-1925) but did not receive the social prestige and accolades due to her. Moreover, in comparison with those of her generation, Faust honored her contributions as surpassing those of both men and women because she advocated not just women’s rights, but human rights such as freedom and justice. It was in the interest of reason, peace, and all mankind, that women no longer be suppressed.

Anneke’s opinion with regard to women’s rights and freedom diff ered slightly from that expressed by many American women. They believed, for example, that God was the ultimate judge while Anneke maintained that it was a matter of reason.139 Anneke expressed these beliefs in a speech she gave at the Convention on the Rights of Women in Mil- waukee in 1869. She also implored the participants not to confound the issues of temperance, suff rage, and nativism. Anthony and Stanton had asked Anneke to co-chair this meeting and it led to the organization of the Wisconsin Women’s Suff rage Association.140 Anneke did not believe it was rational to continue to deny women their natural and human rights and appealed to her audiences’ sense of humanity. She also pointed out that there was no document or law that elevated the status of women over men, and yet there were several that perpetuated the falsehood that men were superior to women. A reporter translated a portion of her speech as follows: 138 Faust, “Mathilde Franziska Giesler- There does not exist a man-made doctrine, fabricated ex- Anneke,” 172. pressly for us, and which we must learn by heart, that shall 139 Bus, “Mathilde An- henceforth be our law. Nor shall the authority of old tradi- neke,” 82. tions be a standard for us — be this authority called Veda, 140 Ibid., 85.

RICHARDS-WILSON | MATHILDE FRANZISKA ANNEKE 161 Talmud, Koran, or Bible. No. Reason, which we recognize as our highest and only law-giver, commands us to be free. We have recognized our duty — we have heard the rustling of the golden wings of our guardian angel — we are inspired for the work. We are no longer in the beginning of history — that age which was a constant struggle with nature, misery, ignorance, helplessness, and every kind of bondage. The moral idea of the state struggles for that ful- ﬁ llment in which all individuals shall be brought into a union which shall augment a millionfold both its individual and collective forces. Therefore, don’t exclude women, don’t exclude the whole half of human family.141

Anneke’s reference to sacred scripture reminds the reader of the unjust treatment and prolonged divorce she suff ered when confronting Catholic Church authorities about leaving an abusive husband. Lastly, one notes that at the time of his writing, Faust assumed that the

141 Faust, “Mathilde Franziska reader knew who Susan B. Anthony was, which suggests Anthony had Giesler-Anneke,” 173-74. already been widely recognized for her eff orts on behalf of women, History of Women Suff rage, eds. Elizabeth Cady Stanton, whereas Anneke had not. The year was 1918, and the recognition of Susan B. Anthony, and a German-American woman’s contributions at the close of the First Mathilda Joslyn Gage, vol. 2, 1861-1876 (Rochester, World War demonstrates how admirable Faust esteemed her eff orts. 1882), 392-94. He was both laudatory and strategic in honoring Anneke, recognizing 142 “Historical Examples of that the nineteenth amendment to the United States Constitution, Leading Social Entrepre- which guaranteed American women the right to vote, was being neurs: Susan B. Anthony (U.S.),” Ashoka: Innovators discussed at the time of his writing and that champions like Anneke for the Public, https://www. ashoka.org/social_ had played a critical role in the early days of the suff rage movement. entrepreneur (accessed Sep- It was two years later, in 1920, that the amendment was ratiﬁ ed. For tember 28, 2013). “Who Were the First Social this reason and like Anthony, Anneke can be considered a social Entrepreneurs? Susan B. entrepreneur who made a system-changing impact on society.142 Anthony,” PBS Oregon Public Broadcasting, http://www. pbs.org/opb/thenewheroes/ whatis/whatis_ss_2.html Conclusion (accessed October 31, 2013). Social entrepreneurs con- As a German immigrant, Anneke’s challenges in the New World cern themselves with human were complex on account of her gender, professional aspirations in dignity, changing systems, and shift ing mindsets. Their the male-dominated newspaper industry, and German-American primary purpose is not to identity. For example, the printer’s union that organized in 1852 generate proﬁ t but rather to ameliorate the quality of life and had been instrumental in shutting down her newspaper the and to advance full citizen- same year was indeed successful in protecting jobs held by men in ship for populations that have been neglected, mar- the same trade. Still, she championed human rights and dignity in ginalized, ignored, or denied her journalism, lectures, and prose. She was more than a feminist, access to civil and natural rights. she was a humanist, believing that elevating the status and rights of

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women was reasonable and in everyone’s best interests, whether in Germany or the United States. The German-American community in general opposed the women’s rights movement because they viewed it as nativist and in favor of temperance.143 They took pride in their German identity or Deutschtum, and that included allegiance to their cultural heritage and traditional German industries such as brewing. Milwaukee, for example, was home to several breweries established by German-American beer barons such as Frederick Pabst (1836- 1904), Joseph Schlitz (1831-1875), Jacob Best (1786-1861), and Valentin Blatz (1826-1894).144 Milwaukee also had many beer gardens, beer cellars, bowling alleys, and family taverns where German-Americans 145 socialized and enjoyed German beer. Anneke, in contrast to many 143 The suff rage movement of the American suff ragists, believed liquor consumption was a per- met with resistance from nativist populations as sonal choice and not the sole cause of societal evils. She maintained well. Bank, Women of that associating temperance with women’s rights discussions was Two Countries, 2. 146 hurting the movement. She had also sought to preserve her Ger- 144 Milwaukee’s beer barons man heritage by the fact she chose to publish her newspaper and are also memorialized in the Forest Home Cem- writings in German. Her main audience, therefore, was for the most etery where the Annekes part the larger German community and readership. When she spoke are buried. “Self-Guided Historical Tour,” Forest or lectured on the importance of women’s emancipation, she typi- Home Cemetery, http:// cally spoke in German because she could better command her native www.foresthomecemetery. com/what-makes-fh c- tongue. Instruction was also taught in German at her academy and unique/people/ (ac- her stories appeared in the German-language press in the United cessed October 19, 2013). States and abroad. 145 Gebhardt, Mathilde Fran- Despite frequent poor health, the painful loss of four children, and a ziska Anneke, 264. long-distance marriage with Fritz, who oft en pursued his own inter- 146 Bus, “Mathilde Anneke,” ests elsewhere, she negotiated successfully personal and professional 83. roles as a mother, wife, poet and writer, entrepreneurial educator, 147 Bank, Women of Two leading feminist in the women’s rights movement in America, and Countries, 1. active member of the German-American community.147 Similar to 148 Bus, “Mathilde Anneke,” 88-89. other immigrant women who arrived in America unfamiliar with the country and language, her options were limited due to her gender, 149 Anneke’s school was located on the south- multiple familial responsibilities, and lack of fi nancial resources and east corner of Jeff erson opportunities to earn a living other than through writing, teaching, and Oneida (now East Wells) streets in Milwau- and political rights advocacy. She had to make her own way and kee. Krueger, “Madame negotiate her own success in unfamiliar public spheres and busi- Mathilde Franziska Anneke,” 164. She estab- 148 ness climates. Although she was only able to make her newspaper lished it in 1865, and the fi nancially viable for seven months in Milwaukee, she was able to address she listed on her Milwaukee Töchter- 149 sustain successfully her academy for eighteen years until her death. Institut letterhead was Profi t never motivated her; defending human rights and enhancing No. 269 Ninth Street, Milwaukee, Wis. women’s quality of life did. She, therefore, should not be judged on FA&MFA Papers.

RICHARDS-WILSON | MATHILDE FRANZISKA ANNEKE 163 her lack of commercial success, but rather on the broader social and political inﬂ uence and change to which her business activities contributed. She was a social entrepreneur in both spirit and impact. An alumna of her girls’ school best summarizes that impact:

Those who have not known this great souled woman in her activities as educator. . . have not seen her most beautiful traits. All who had the joy of calling her Teacher have such reverence for her that they consider her the greatest factor in their lives. It was not only what she taught but how she taught. The driest subject became a live interest. She could kindle enthusiasm with irresistible power; yet the knowledge we gained was the least of what we took away from her. Our whole beings were permeated with all that was noble and pure. She gave us the indelible stamp of her beautiful spirit. To follow her we had to aim at the stars. Never can we thank her enough for the way of feeling and thinking that she impressed upon us.

Today, pupils of Madam Anneke are unmistakable. Whether surrounded by luxuries, or confronted by the misfortunes and poverty of an adverse world, the undaunted spirit that she instilled is paramount. We try to bestow the teachings of our beloved priestess upon our children. Her only living daughter carries her exalted, beautiful message into wider circles [. . .] and so the spirit of this great woman still ﬂ ames in our generation to enrich and dignify life.150

Anneke embraced both her German heritage and her life in her new homeland and worked to contribute to the education, wellbeing, and equality of woman in both her native and adopted homelands. She was the ﬁ rst immigrant woman to speak publically on behalf of the American women’s suff rage movement.151 In the German lands during her youth, she lost social standing aft er a scandalous divorce and her participation in the German revolutions of 1848. However, 150 Piepke, Mathilde Franziska Anneke, 9. by the end of her life in the United States, she regained a prominent position among the German-American community and within the 151 Bus, “Mathilde Anneke,” 87. Brancaforte, Mathilde Franziska women’s rights movement. In 1931, the National League of Women Anneke, 44. Voters recognized her as one of the four Wisconsin pioneers in the 152 FA&MFA Papers. suff rage movement and her name was inscribed on a roll of honor at their national headquarters.152 In the 1930s, she was considered 153 Brancaforte, Mathilde Franziska Anneke, 7. one of the most inﬂ uential women in the United States.153 With the

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outbreak of the Second World War, her name and legacy were for the most part forgotten on both sides of the Atlantic, only to be revived in recent years. Anneke is honored in Cologne and several streets are named aft er her. In November 1988, the German Federal Postal Ser- vice honored Anneke on a postage stamp in a series called “Women of German History” (Frauen der deutschen Geschichte).154

Stephani Richards-Wilson is an Assistant Professor of Management at Alverno College in Milwaukee, Wisconsin, and teaches in the Social Impact Graduate On- line Program at Claremont Lincoln University in Claremont, California. She holds a PhD in German from the University of Wisconsin-Madison and a Doctorate of Education in Leadership Studies from the University of San Diego, where she served as the Director of the MBA Program. Her research interests include entrepreneurship, business education, the German-American immigrant experience, and Willi Graf of the Nazi resistance group called the White Rose, the subject of her second dissertation.

154 “Mathilde Franziska Anneke,” http://de. wikipedia.org/wiki/ Mathilde_Anneke (accessed March 1, 2014).

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The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

A REPUTATION FOR CROSS-CULTURAL BUSINESS: HENRY VILLARD AND GERMAN INVESTMENT IN THE UNITED STATES

Christopher Kobrak

For despite his outstanding qualities of courage, determination, perseverance, and benevolence, Henry Villard was also overly optimistic, disinclined to focus on details, and prepared to risk all for the sake of a worthy but shaky enterprise — shortcomings that eventually would lead to ﬁ nancial disaster and the loss of his corporate empire.

Alexandra Villard de Borchgrave, Henry Villard’s Great Grand- Daughter, The Life and Times of an American Titan, Preface

Introduction Émigrés capture our interest for many reasons. For some, like Albert Einstein (1879-1955), that interest is derived from their worldwide prominence in a particular fi eld and the specifi c circumstances of their departure from their home country. Others, like investment banker Paul Warburg (1868-1932), made a mark by introducing aspects of their home-country culture to their new home. Henry Villard, by contrast, will be remembered for the degree to which he embraced nearly all aspects of his adopted country’s culture, its sense of limitless possibilities, and perhaps its sense of invincibility. To be sure, he built a business by connecting German and American fi nance and shared many of the dreams of American and German business leaders, but his reputation mirrors widespread beliefs about the virtues and vices of his adopted land. A native German speaker, charming, charismatic and master of cross-cultural business, Villard was as convinced of his own destiny as that of his adopted home country. He came to prominence as one of America’s fi rst “Cowboy Capitalists.” His American career as a journalist, entrepreneur, and fi nancier spanned nearly the entire second-half of the nineteenth century and involved some of the most important fi gures in American and German business history.1 Indeed, although he and others may 1 Christopher Kobrak, Banking on Global Markets: have exaggerated many aspects of his Horatio Algeresque biography, Deutsche Bank and the few born or naturalized Americans could boast of such a varied and United States, 1870 to the Present (Cambridge, meteoric career. 2008), 28-31.

KOBRAK | HENRY VILLARD 167 Family and Ethnic Background Villard is a historical ﬁ gure about whose early life we do not know whether we know a lot or a little. Much information about him exists in books and archives, but most of it came from Villard himself or from close family members.2 What is clear, though, is that Villard’s personal and professional development was deeply inﬂ uenced by politics.

Henry Villard (born Heinrich Hilgard) was born on April 10, 1835, to a fi nancially comfortable family in Speyer, one of the oldest cities in the German states. Located on the west bank of the Rhine, Speyer was part of the Pfalz (Rhenish Palatinate), a region ceded to 2 There are extensive collec- the kingdom of Bavaria twenty years before Villard’s birth. During tions of Villard’s letters and those of friends, family, and the French revolutionary wars of the late-eighteenth and early- rivals at Harvard’s Baker Li- nineteenth centuries, the region had been incorporated into France brary, the Library of Congress, the Deutsche Bank Archive and bore many ideological infl uences and scars from the French (HADB), and the Morgan Li- occupation. Villard’s father, Gustav Leonhard Hilgard (1807-1867), brary. Villard wrote an autobiography that focuses on his was a relatively successful bureaucrat from a Protestant family, his early life and tends to sugar- mother, Katharine “Lisette” Antonia Elisabeth Pfeiff er (1811-1859), coat his business failures. (Me- moire of H. Villard: Journalist a Catholic from a military family with Bavarian roots. The Hilgards and Financier, 1835-1900, 2 were respectable members of the haute bourgeoisie. As the youngest vols. (Westminister, 1904). His great-granddaughter’s bi- of three children, and the only boy, Henry Villard’s later willfulness ography Alexandra Villard de may have resulted from a perverse combination of too many parental Borchgrave, Villard: The Life and Times of an American Ti- expectations and too much indulgence. From an early age Villard tan (New York, 2001) contains seemed drawn to the romantic, adventurous side of his family, some some passages that read like family folklore but in many of whom immigrated to the United States and settled in Illinois and parts is extraordinarily candid the surrounding region. and agrees with other more scholarly works. She and her co-author, John Cullen, rely Some historical accounts of Villard’s life focus on how his anti- on an early draft of Villard’s own autobiography, which may Prussian, liberal sentiments drew him to America, but Villard had have been buttressed or em- normal adolescent diffi culties which alienated him from his father. bellished by family reminis- cences impossible to verify. I Repeated problems due to neglecting his studies and fi nances gave rely on her account of his early rise to a series of unpalatable choices for the eighteen-year-old, of life, especially where it does not fl atter her great grand- which buying a second-class ticket on a clipper ship, the Nordame- father or confl ict with other rika, from Hamburg to New York seemed to be the least onerous. sources and plausibility. Diet- rich Buss’s: Henry Villard: A Leaving the German states in August of 1853 without the knowledge Study in Transatlantic Investments of his parents, Villard changed his name to an anglicized version of a and Interests, 1870-1895 (New York, 1978) is a good start- schoolmate’s name which closely resembled his own. For a relatively ing point for the study of his long period neither his father nor his mother knew whether he was business career. Villard is cited in many histories and biogra- alive or dead. With few skills and no knowledge of English, earning phies of the nineteenth cen- a living in the United States was not easy for Villard. For almost two tury, which will be mentioned in the notes. years he wandered virtually penniless, fi rst in New York City and then

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in the Midwest, from one odd job or apprenticeship to another while living, in part, off the kindness of fellow German immigrants who made up a substantial portion of the populations in many of the cities he visited.3

Sometime late in 1854, Villard ﬁ nally visited his relatives in Belleville, Illinois. At the time, Belleville was one of the great American centers of German culture. The community was populated by German political refugees. Many had been involved in the Revolutions of 1848/49, which had necessitated their departure from the Ger- man states. Situated in the heart of the United States, Belleville looked like a typical German village but contained an intellectual elite that shared America’s republican values and devotion to freedom from political repression. They were political liberals who loved most of the principles of their adopted land, but not all. Many rejected social reform- Figure 1: Siblings Anna, ist traditions popular in the 1830s and 1840s such as the tem- Emma, and Heinrich (Henry Villard) Hilgard, perance cause and women’s rights, but the town was one of the 1844. Private collection. centers of the abolitionist movement. Villard’s time in the community would have a profound impact on his relationship to his adopted country.4

When Villard suddenly appeared in Belleville, his relatives at ﬁ rst showed little enthusiasm for his arrival but did provide him with some ﬁ nancial support. Even with the help of his family, however, his early twenties were crowned with few great successes, but they did lay the foundation for some of his great achievements. Working as a clerk in a law offi ce, he developed an interest in pursuing legal studies. More importantly, he improved his English during this period and, anxious to avoid demeaning manual labor, started to 3 The Life and Times of an devise grandiose business schemes. By the age of twenty-one, he American Titan, 1-55; and “First Experiences had earned suffi cient seed money to pay his expenses for an attempt in America,” Manuscript to round up investors to buy land in Kansas for a kind of German Fragment of Villard’s Memoires, Harvard Col- “free-soil” community intended to thwart the advance of slavery in lections. the territory. The enterprise never got off the ground, but Villard 4 The Life and Times of an made some contacts among anti-slavery activists and, as ever free American Titan, 55-63.

KOBRAK | HENRY VILLARD 169 of inhibitions, he visited some important potential supporters, such as the senior senator from Illinois, Stephen A. Douglas (1813-1861). During his “dog-and-pony” show to drum up investors for the Kansas venture, Villard retraced his poverty-stricken steps of just a few years earlier, but this time with enough cash to stay in fi rst-class lodgings. Despite the support of many infl uential, anti-slavery Republicans, whom he had come to know by working on the new party’s election campaigns, Villard’s lack of business sense and infl uence was evident and certainly contributed to the enterprise’s failure. The experience, however, did nothing to thwart his personal ambition and taste for a more refi ned life. A few years later, he headed west to mine for gold, an undertaking that helped ignite a passion for the prairie states and led to a book about his experiences, but produced no yellow metal and quick fortune.5

First Real Career Villard’s creative bent and desire to avoid conﬁ ning, repetitive tasks led him to journalism. For most of the 1860s, Villard alternated between working as a freelancer and an employed journalist for a series of German and American newspapers reporting on a variety of topics. Once Villard established a reputation as a journalist, he succeeded in arranging the unusual step of syndicating his work. Some of the newspapers were ﬁ nanced openly by political parties. As a supporter of the Republicans (though not a U.S. citizen until 1864), he preferred writing for their newspapers, but he enjoyed some of his greatest successes with Democratic newspapers. It was while working for one of those newspapers in 1858 that he covered the famous Lincoln- Douglas debates. In contrast to his later expressions of impassioned support for Abraham Lincoln, Villard’s initial reaction to the senato- rial and later presidential candidate was unfavorable to say the least.

Although he would have been happier just to let the South secede following Lincoln’s presidential election in 1860, the Civil War provided Villard with a journalistic opportunity. Even before the ﬁ ghting started, he enjoyed some choice assignments. He reported for the New York Herald Tribune on Lincoln’s activities in Springﬁ eld, Illinois, aft er the November election but before the inauguration in the spring of 1861. Although his views of Lincoln had mellowed somewhat, in November of 1860, soon aft er the election, Villard observed:

I doubt Mr. Lincoln’s capacity for the task of bringing light 5 Ibid., 65-75. and peace out of the chaos that will surround him. A man

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of good heart and good intention, he is not ﬁ rm. The times demand a [Andrew] Jackson.6

Although Villard’s comments may have been inﬂ uenced by the politics of the newspaper for which he was writing, considering how well Lincoln proved his resolve during the conﬂ ict, Villard remarks lacked presence and historical insight. Indeed, later in life, he came to appreciate Lincoln’s vision for America.

As an established reporter with good contacts and considerable charm, Villard secured interviews with several important military and political fi gures during the war. He witnessed and wrote about many of the major engagements of the confl ict and endured some of the same risks and deprivations as ordinary soldiers, which may have contributed to chronic ill health throughout his later life. His work as a war correspondent, which he returned to briefl y during the Austro-Prussian and Franco-German Wars (1866 and 1870-1871, respectively), lasted until the last full year of the American Civil War, when he was called back to Europe by his family. Villard’s oldest sister was dying; their mother had already passed in 1859. He reached Speyer a few days before his sister’s death. Villard stayed in Europe for approximately six months, during which time he acquired his inheritance from his mother’s estate (minus numerous deductions that his father felt appropriate to settle Henry’s many prior debts), but his turbulent relationship with his father had changed little in the decade since he had left home and gave him little reason to linger in Speyer. He returned to the United States in March 1865 and on arrival in Boston in April, he learned that Richmond had fallenon April 2, Lee had surrenderedon April 9, and Lincoln had been assassinated.7

Business Development His arrival in Boston was no accident. With his mother’s inheritance and a reasonably good start as a journalist, Villard was intent on pro- posing marriage to Boston resident Helen Frances (Fanny) Garrison 6 Quoted in The Life and (1844-1928), daughter of William Lloyd Garrison (1805-1879), Amer- Times of an American Titan, 130. Originally in Henry ica’s most famous (indeed he was world famous) and perhaps most Villard, Lincoln on the Eve notorious abolitionist. While others had talked of limiting slavery to of ‘61: A Journalists Story, ed. Harold G. and the Old South, gradual abolition of the institution, or sending blacks Oswald G. Villard (New back to Africa, for decades Garrison had called for an immediate and York, 1941). complete end to the practice, and equal rights for African-Americans, 7 The Life and Times of an a perspective which was not only radical but seditious for most Ameri- American Titan, 260-61. Villard’s father died in cans in the ﬁ rst half of the nineteenth century. Garrison had publicized 1867.

KOBRAK | HENRY VILLARD 171 his views in the Liberator, the leading abolitionist newspaper, which he published from 1831 until the Thirteenth Amendment to the Consti- tution made slavery unconstitutional in 1865. To the horror of many, on one occasion he had even burnt a copy of the “great national sin,” the United States Constitution, which had enshrined the abomina- tion of slavery into law. Villard evidenced no problem with Garrison’s radical feelings about slavery, but later accounts do claim that this Pfälzer (someone from the Rhenish Palatinate) was much less happy about the family’s stand against smoking and drinking and in favor of women’s rights.8

Villard had met Fanny quite by chance several years earlier. Despite Fanny’s views on some of Villard’s habits, they fell in love relatively quickly and married in 1866. The couple was devoted to one another. Well into old age, Villard seemed to have genuinely bemoaned any absences from her. They doted on their four children, three of whom survived to adulthood: Harold (1869-1952), Helen (1868-1917), and Oswald Villard (1872-1949). When their son Henry died at age seven in 1890, the parents penned a tribute to him. Fanny’s father was at ﬁ rst a little skeptical about his future son-in-law’s prospects and his break with his own father, but the two seemed to have enjoyed a good deal of mutual respect.

Soon aft er their marriage, the couple made two trips to Europe. The trips had several purposes. Villard wanted to introduce his new wife to the pleasures of Europe and to his family. One of the trips coincided with a triumphant tour of abolitionist groups in the United Kingdom by his father-in-law, whose consistent support of the cause was much appreciated by many parts of British society. Villard continued some of his journalistic work and sought help for his many physical ail- ments at European spas.9

Perhaps, most importantly, it was at this time he began an entirely new career. Garrison introduced his son-in-law to the American So- cial Science Association, a group organized in 1865 to discover the immutable laws governing man and his social relationships and apply them to contemporary society. Its members included intellectuals, politicians, and a number of prominent businessmen. Villard became the organization’s secretary, editor of its journal, the Journal of Social Science, and one of its chief fundraisers.

8 Ibid., 231-35. Although most of his prior work experience was as a war corre- 9 Ibid., 270-80. spondent, by the late 1860s Villard had begun to grow interested

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in marketing American securities abroad. By leveraging his status as William Lloyd Garrison’s son-in-law and his fl uency in German and English, he had developed enough contacts and fi nancial savvy to engage in selling American securities while traveling in Europe. During the American (1865-73) and German (1870-73) post-war boom years, this was probably a lucrative business.10 On the heels of the 1873 international fi nancial collapse and depression, his role as a fi nancial intermediary shift ed. While convalescing in Heidelberg, Villard was approached by a group of Frankfurt investors, who were holding Wisconsin Central Railroad bonds that were in default. The investors asked him to perform a somewhat diff erent task. His mission between the two countries changed from mere salesman to troubleshooter, although privately some of the bankers also wanted him to go back to the United States to obtain undervalued securities whose prices had been signifi cantly depressed by the panic.11

The Northwest Passion It was at this time that Villard developed, or rekindled, two loves: the Pacifi c Northwest region and railroads. In typical Villard fashion he convinced Siegmund Jacob Stern (1809-1872), the leader of the Frankfurt banking group, to double-down on his American railroad investments. Villard was confi dent that future immigration would lead to much higher revenues and profi ts for the existing rail lines in the West and that the poor management of existing rail lines could be easily remedied. With German backing, Villard eff ectively bought up virtually all the rail lines between Oregon and San Francisco, establishing the Oregon Railway & Navigation Company (ORN), the fi rm to which he probably had his deepest, long-term business attach- ment. As president of the new concern, his reputation grew, but the dream of controlling the transportation resources of the entire Pacifi c Northwest eluded him. Moreover, his existing ambition brought him into confl ict with three major rail lines, the Union Pacifi c (UP), the Northern Pacifi c (NP), and the Great Northern (GN). Like many of the moguls with whom he now was in confl ict, Villard realized that only true consolidation of rail lines within a region could avoid ruinous competition and make the huge initial investments profi table, an approach that went well beyond the pooling arrangements and loose agreements that railroad offi cials had oft en devised during the 10 Ibid., 280-81. previous decades.12 11 Kobrak, Banking, 28-31. To realize his dream of control, Villard, acting from the seat of fi - 12 Ibid., and Buss, Henry nancial power in New York City, needed to achieve two goals: get out Villard, 1-150.

KOBRAK | HENRY VILLARD 173 from under the control of his foreign investors and buy at least one of the major neighboring lines. By 1881 he had realized both aims. First he targeted the profi table Oregon Steam Navigation Company, which operated riverboats, a shortline railroad, and other transportation assets along the Columbia and Willamette Rivers in Oregon. Using the assets of the target line as security, he managed to fi nance its acquisition in what may have been the fi rst management buyout (MBO) in history. Villard also convinced the Frankfurt group to sell its holdings in his unprofi table Oregon Steamship Company to him at a loss. He combined both operations into a new fi rm, the Oregon Railway & Navigation Company. Yet the new line did not yet stretch across the West. For that he would need more money for additional construction, for conversion of narrow gauge lines to standard gauge, and for acquiring control of other lines, but he was well on the way to securing his objective. To achieve the next step, he turned his sights on the Northern Pacifi c Railroad, chartered by Congress in 1864 with rights to build rail and telegraph connections between Lake Superior and Puget Sound, WA. By the 1870s the NP had already experienced one bankruptcy. Buoyed by new fi nancing, it resumed work on the second transcontinental rail line and expanded its activities further west. Convinced that the only way of saving the Oregon Railway & Navigation Company was by acquiring the majority of the Northern Pacifi c’s shares, Villard in 1883 used his contacts on Wall Street to gather eight million dollars from 53 investors (approximately $180 million in 2010 dollars).13 Remarkably, this feat was accomplished within twenty-four hours of his private announcement and without his new investors learning the purpose of the money. By this time, Villard had accumulated enough capital himself that he could contribute nearly one million dollars (approximately $22.5 million in 2010 dollars) to this “blind pool,” for which he served as the only “seeing- eye dog.” Even his old client Stern was reported to have participated, despite Villard’s earlier double-dealing. The Northern Pacifi c’s shares were added along with those of the Oregon & Transcontinental, a holding company that controlled the ORN, to a new holding company 14 13 All 2010 dollar fi gures based that now controlled 2,700 miles of track in the West and Midwest. on Samuel H. Williamson, “Seven Ways to Compute the The various rail lines under Villard’s fi nancial control were still not Relative Value of a U.S. Dol- lar Amount, 1774 to pres- connected, however. To that end, Villard raised enough money to ent,” MeasuringWorth, 2011 employ 25,000 workers laying track at a rate of three miles a day http://www.measuringworth. com/uscompare/, using the (with a burn rate of four million dollars per month (approximately $90 Consumer Price Index. million per month in 2010 dollars)) across open territory in Montana 14 Kobrak, Banking, 30-31. that had recently witnessed the Battle of the Little Bighorn, the worst

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military disaster in the U.S. government’s long series of battles with Native Americans. When the transcontinental connection was completed in September 1883, Villard controlled the second line that stretched from the Mississippi to the Pacifi c, a distance equal to that between Paris and Moscow. Villard threw a triumphant party with guests that included Figure 2: Northern Pacifi c Railroad Spike Excursion, intellectual notables, a former American president, and many current n.d. Gaston Sudaka, illus- and potential investors, including the managing director of Deutsche trator. Private collection. Bank, Georg Siemens (1839-1901), whose experiences in the United States during that trip strongly infl uenced his personal and business outlook, according to his son-in-law biographer.15

Villard’s First Financial Meltdown The bill for the construction and the Golden Spike party arrived in the fall of 1883. Like so many of his undertakings, Villard’s fi rst involvement with the Northern Pacifi c refl ected his disdain for any constraints on his vision and his abhorrence of cost-benefi t analysis. Villard’s undertaking had added ten million dollars in watered-down stock and forty million dollars in debt to the North- ern Pacifi c accounts (approximately $220 million and $880 million, respectively, in 2010 dollars). Even as reports about the company’s shaky fi nances surfaced in late September, Villard somehow issued another eighteen million dollars in debt (approximately $400 million in 2010 dollars), half sold in Germany. Predictably, throughout the fall, Northern Pacifi c bond prices tumbled as further cash needs were announced and the company started relying more and more 15 Karl Helff erich, Georg von Siemens: Ein Lebensbild on short-term fi nancing. By the end of October its common shares aus Deutschlands grosser were selling at twenty-seven-percent of their nominal value, but Vil- Zeit, vol. 2. (Berlin, 1921), 228-29. lard saw the dip in share prices as an opportunity for the company to buy back its own stock, which further increased the company’s 16 Jean Strouse, Morgan: American Financier (New debt ratio.16 York, 1999), 240-41.

KOBRAK | HENRY VILLARD 175 In December Villard fi nally bowed to the inevitable. The drop in the NP’s share price threatened the fi nances of his other holdings and led to his personal bankruptcy. With the line and his personal fi nances in the hands of a group of bankers led by J. P. Morgan (1837-1913), he tendered his resignation from all his administrative positions (as required by the bankers) and lost many of his assets, including his Madison Avenue mansion, completed just weeks before the fi nal crisis, and which still stands as the historic wing of New York Palace Hotel. The bankers’ reorganization of Villard’s railroad interests saved the lines from another bankruptcy for nearly a decade, despite ever greater investment needs and tensions among investors. Typically, Villard did not see his management or other skills as responsible for the bankruptcy. His lack of interest in details and accounting were of no consequence. In his mind, bad luck was the culprit.17

The Deutsche Bank Connection Villard’s German roots provided him with an opportunity to revive his fortunes. He, his wife, and children spent nearly two years in Berlin aft er the disaster. In 1884, Villard even considered moving back to Germany permanently. Despite heavy losses infl icted on Ger- man investors by the NP’s fi nancial diffi culties, some Germans and Americans continued to have faith in Villard’s managerial reputation and trusted him to identity and safeguard American investment opportunities overseas. Still enchanted by his visit to the United States and sharing many liberal convictions with Villard, Georg Siemens, in particular, seemed willing to overlook his American friend’s failings. In 1886 Deutsche Bank, by then one of Germany’s leading banks with a strong international focus, was still anxious to sell Ameri- can investments to Germans and was unimpressed by NP’s new management. It signed Villard to a lucrative contract to represent the bank and Stern in the United States. Villard’s responsibilities were varied and extensive. Within a short time, he had introduced a long list of new transportation and other investments to German investors through Deutsche Bank. Deutsche Bank even made a $5 million equity investment (approximately $120 million in 2010 dollars) that got Villard back into the management of a number of western transportation companies including the Northern Pacifi c. Against the advice of many of his colleagues, Siemens agreed to make further signifi cant investments in railroad lines and other companies.18 As 17 Kobrak, Banking, 34-35. Deutsche Bank’s U.S. investment advisor and manager for nearly a 18 Ibid., 37-38. decade, Villard claimed to have sold $64.3 million in U.S. securities

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(approximately $1.6 billion in 2010 dollars) to German investors, an amount signiﬁ cantly larger than Deutsche Bank’s total equity capital and nearly as great as its total assets in 1890.19

Villard’s principal device for managing these extensive investments and encouraging new ones was to create a holding company structure, which would at once diversify risk and serve as a conduit for the fl ow of funds. The North America Company (NAC) required $24 million (approximately $660 million in 2010 dollars) to hold large packets of shares in NP, the Wisconsin Central, and the company near and dear to his heart, the Oregon & Transcontinental Company, the successor to his fi rst transportation investment, as well as other fi rms. When Deutsche Bank balked at providing all of the huge sums for these investments, more than its own equity capital base, Vil- lard sought other investors. Little is known of how Villard’s holding company scheme worked, not even his main investors understood its convoluted structure, but the idea seems to have been that the NAC would serve as an investment fund, which would simultaneously allow investors to invest in a wider range of companies, thereby exercising more control over the companies by concentrating ownership, and serve as a reserve fund for the investments should access to capital become impaired. Organized under the laws of New Jersey with $50 million in capital (approximately $1.2 billion in 2010 dollars), NAC would keep some cash and have the option to sell some of its holdings to support entities short of capital, a kind of pooling of resources to avoid panic borrowing or sales of equity. In addition to Deutsche Bank, several other fi nancial heavyweights were involved, including John D. and William Rockefeller, J.P. Morgan, Kuhn Loeb & Company, and Speyer & Company. Even in early 1890, though, when fi nancial markets were fairly strong, much of its fi nancing came from short-term debt, collateralized by its own stock and that of its holdings, an obvious weakness for a company that was designed to support other companies’ fi nancing needs and equity values in turbulent times. As U.S. fi nances deteriorated in the fall of 1890, the company had to draw on more help from German investors, under- mining NAC’s credibility and that of its president, Villard.20 However, the worst was yet to come.

Other Electrifying Ideas 19 Helff erich, Siemens, One of the beneﬁ ciaries of the holding company was supposed to 246. Deutsche Bank‘s be Villard’s old friend, Thomas Alva Edison (1847-1931). Villard 1890 Annual Report. had known and admired Edison since 1880. As an early investor in 20 Kobrak, Banking, 39-40.

KOBRAK | HENRY VILLARD 177 Edison ventures, he had arranged for demonstrations of Edison’s dynamo and lamps, installed Edison lights on some of his trains, and tried to get German investors interested in providing capital for Edison’s U.S. companies and bringing some of Edison’s patents to Europe. Indeed, Villard was hawking Edison’s companies in Europe when he met Siemens for the second time. Edison and Villard shared many attributes: both were visionaries with very little patience for day-to-day business matters and ﬁ nancial constraints, and both were hard of hearing and deaf to many kinds of criticism. Their large visions required capital and investors, a fact which brought them together, creating a mutual dependence. Edison believed that only large generators and an extensive distribution system for electricity would create the necessary infrastructure for his inventions, a huge upfront investment before light bulbs and electricity could be sold in great quantities. Villard loved big deals.21

Villard was ideally placed to fi nd an international solution for many of Edison’s problems. While working for Deutsche Bank, he also represented some of the interests of Siemens & Halske (S&H), the German electrical giant. Deutsche Bank itself was deeply involved in electrifi cation, in part through Georg Siemens’ family connections with S&H, and its fi nancial support of rival Allgemeine Elektricitäts- Gesellschaft (AEG). Although many confl icts of interest and competing product lines existed, Villard and Deutsche Bank helped raise German and American capital to allow Edison to consolidate his interests and fund expansion. A truly speculative venture, it turned out to be one of the most important, and international, private equity deals of the nineteenth century.22

In April 1889, Edison General Electric Company (EGE) was formed. Edison hoped that the new company and its by-and-large distant shareholders would relieve him of ﬁ nancial pressure. J.P. Morgan, who had been one of his principal backers, and rarely a silent partner, took only a small amount of the shares. The amounts of equity capital varied over time, but seem to have begun with $3 million and gone up to $8.3 million (approximately $73 million and $203 million respectively in 2010 dollars). As representative of the German investors, Villard become the company’s ﬁ rst and only president.23

The company’s business model helps explain the large increase in 21 Ibid., 47-49. ﬁ nancing needs. The new company not only was intended to integrate 22 Ibid., 47-61. Edison’s manufacturing and marketing interests in electric lighting 23 Ibid. and machine works in order to achieve better operating effi ciencies,

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it was also designed to expand the business by helping fi nance the conversion or construction of power stations in major cities. Before electricity could be used for devices (lights and appliances), power had to be generated and distributed. To this end, EGE used its own shares to buy an interest in some new and old local electrical companies and to help fi nance further construction. The machinery and cable for generation and distribution was sold to local power companies by EGE, which was able to incur large receivables fi nanced by the deep pockets of their German investors. Increasing sales required more staff and above all more capital to fi nance customers.24

Predictably, confl icts between management and the investors grew steadily. S&H resented the treatment of its patents and its lower- than-expected profi ts on the sale of cable to the new company. EGE profi ts were lower than expected and declared dividends went unpaid. Some of the participants started to challenge Edison’s conviction that direct current was reliable and effi cient, an issue that would haunt Edison for years and one about which he was ultimately proven wrong. Villard had problems fulfi lling his promise that EGE shares would be listed on the New York Stock Exchange, a failure that would hurt their price and liquidity. NAC’s Edison share holdings and loans brought little relief. The original agreement among the syndicate members required investors to hold all or parts of their shares. They were repeatedly requested to extend the period. Operational problems mounted. The consolidation of the former businesses progressed more slowly than originally anticipated, and patent disputes threatened some business operations. Although investors found the company’s profi ts disappointing, sales grew quickly, despite vigorous competition, adding to the company’s working capital requirements. Even Edison started to lose faith in his friend. EGE had been founded to make his life easier and provide him with more time for his inventions, not to make his life more complicated.25

Once again, Villard saw a big deal as the solution. As early as March 1890, he argued that combining EGE with its rival Thomson-Houston 24 Ibid. As an example for the regional activities 26 would create the “greatest enterprise in the world.” Founded by comp. Uwe Spiekermann, Elihu Thompson (1853-1937), one of the most prolifi c inventors in “Business and Politics: The Contested Career of American history, Thompson-Houston (TH) was much better run Charles F. Pfi ster,” in IE. than EGE. Thompson focused on scientifi c matters and managerial 25 Ibid., 47-61. control was given over to professional managers. Under the leadership of Charles Coffi n (1844-1926), a former shoe company executive, 26 Villard to Deutsche Bank, March 7, 1890, HADB, TH recruited many skilled managers who concentrated on strategy, A404.

KOBRAK | HENRY VILLARD 179 marketing, and technical innovation. The company was organized into a functional structure with clearly defi ned departments. Un- like EGE, it broadened its product line to include both direct current (DC) and alternating current (AC) for lightening and streetcar systems. As a leader in management organization and a supplier of electronic equipment, TH enjoyed solid fi nancial backing.27 From the very founding of EGE, Villard had pushed for more consolidation of competing companies. Because the ensuing merger between EGE and TH spelled the end of his involvement in this sector, as well as Edison’s and the German companies’ involvement in the new company, some accounts give insuffi cient credit to Villard’s original insight. Taking credit for the deal, J.P. Morgan led the consortium that fi nanced the merger. TH’s old shareholders held the major position in the new company. EGE’s shareholders, including Edison, Deutsche Bank, and the other Germans, chose to hold little or nothing of the now Morgan-controlled enterprise. Even though Villard’s rosy pre- diction about the future of the new company, General Electric (GE), was borne out, in 1892 the Germans seemed to count their blessing that they got their money back before new management or macroeconomic diffi culties arose.28

In fairness to Villard, he had a very full professional and personal life at this time, including, tragically, the death of his youngest son in June 1890. The bereaved family toured Europe for many months. Villard found time, however, to interview the recently ousted German Chan- cellor, Prince Otto von Bismarck (1815-1898), as well as other German political and business leaders. Moreover, not only was he running the Edison businesses during the period, Villard took an active role in the 1892 presidential election campaign of his friend Grover Cleveland (1837-1908), a Democrat whose commitment to the Gold Standard endeared him to the business community. Cleveland’s success in the election did not eliminate fears that the United States would not honor its gold commitments, which made getting short-term loans in New York diffi cult, severely threatening the NAC of which he was still president. Ostensibly, he was also overseeing Deutsche Bank’s (and its clients’) other substantial investments in the United States.

27 W. Bernard Carlson, Innova- By the middle of 1893, this latter responsibility showed obvious signs tion as a Process: Elihu of neglect or worse. The physical assets, not state of incorporation, of Thompson and the Rise of General Electric, 1870-1900 the vast majority of Deutsche Bank’s and its clients’ investments in the (Cambridge, 1991), 203-19. United States was west of the Mississippi, but Villard’s offi ce and resi- 28 Kobrak, Banking, 59-61. dence was in New York City. Although on the surface this division may

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seem odd, in practical terms the fortunes of these assets depended to a large extent on the health of East Coast and European capital markets.

Second Bankruptcy The second Northern Pacifi c bankruptcy was part of the third great wave of American railroad failures. In 1893, 74 companies representing $1.8 billion in capital (approximately $45 billion in 2010 dollars), nearly one-sixth of total U.S. capacity, went into receivership due to the fi nancial panic that spring. Since the previous bankruptcy wave in 1884 (the fi rst occurred in 1873), the Northern Pacifi c evidenced a seemingly unquenchable thirst for capital. In the decade following Villard’s fi rst departure from the company, NP had more than doubled the length of track it controlled, accounting for approximately three percent of the United States’ entire stock. It controlled terminal, coal, logistic, and navigation companies and an amount of land equal to fi ft y percent of present-day Germany. Its operations actually consisted of 44 separate companies with $380 million in debt (approximately $9.5 billion in 2010 dollars). In 1893 with the parent company alone owing $10.9 million in interest and sinking fund payments (approximately $273 million in 2010 dollars), its fi xed fi nancial costs alone put it at considerable risk. Considering that average operating revenues and income over the previous three years were $24.5 and $9.8 million respectively (approximately $613 and $245 million in 2010 dollars), even an untrained eye should have seen that the company was exposed to a downturn in economic activity.29

Despite the risks as 1893 began, Villard and his investors remained remarkably sanguine. Deutsche Bank managers expressed some concern about the price of its preferred shares, but did not have concerns about anything else. In May of 1893 panic swept through U.S. capital markets as fears mounted that America, despite Cleveland’s election, would fall off its strict adherence to the Gold Standard. The panic led to one of the most severe downturns in U.S. history. With banks failing, unemployment rising, and a sharp drop in equities prices, short-term lending was hard to come by. Farm commodities prices, already in decline and a mainstay of NP’s business, fell further. Villard’s NAC, which was to have served as a ﬁ nancial backstop, itself could not get additional loans from its original investors or acquire new ones. Price competition among the rail lines increased further, impairing revenues. In the early summer NP’s share price dropped to less than eight percent of its par value, a sure sign that bankruptcy 29 Ibid., 62-63.

KOBRAK | HENRY VILLARD 181 was imminent, but even companies like GE were at risk.30 Villard was not alone in underestimating the dangers inherent in over investment, conﬂ icting and unclear bankruptcy laws, as well as volatile capital markets. The bankruptcy of the NP and its sister companies was large, but by far not the largest case during the crisis. By 1896 twenty percent of all U.S. railroad trackage was held by bankrupt companies.

Villard’s role in the NP bankruptcy saga says as much about Villard as it does about the diffi culties of managing investments over great distances, especially in an era with high macroeconomic turbulence, inappropriate or nonexistent fi nancial regulation, and rudimentary communication technologies compared with that of the twenty-fi rst century. Without a clear warning about NP’s dire straits, in the spring of 1893 Villard announced his desire to resign his responsibilities with Deutsche Bank, but the resignation had not been accepted immediately and no replacement had been found. On August 3, Villard cabled his conviction that the only feasible option for NP was receivership, but the letter with his explanation of the decision and the defense of his own behavior was dated August 15. German investors were furious not just about what happened but also about how decisions were communicated. Aft er months of false hopes and dire rumors, Villard fi nally wrote in mid-August to his honorable friend, Siemens, that NP had come under a court-appointed receiver, a step Villard said he had encouraged albeit without prior Deutsche Bank consultation over essential aspects such as the choice of administrators. Although Villard claimed that his own responsibility made writing the letter diffi cult, the gist of his missive outlined all his achievements, his own lack of fault, and how much he himself had lost. Typically, he was optimistic about an economic recovery and the possibility of mitigating excess competition that would eventually justify the high levels of investments the company had made.31 His optimism would eventually be justifi ed, but the turnaround took three years and a lot of patient administrative savvy, hardly attributes which he had hitherto displayed. Moreover, at least some of the inves-

30 Ibid., 63-64. tors doubted his sincerity. Even his great-granddaughter reported, in contrast to his assertions about losses, that Villard, who owned 31 See various correspondence among Villard, Siemens, directly or indirectly NP debt and equity, was well prepared for the Deutsche Bank, and Villard’s crisis and lost little of his personal fortune.32 secretary, July and August, 1893, HADB, A674, A1142, A718. German investors were furious, but despite many misgivings, they needed Villard, at least during the early stages of the NP’s reorganiza- 32 Life and Times of an American Titan, 375. tion. Villard, who initially asserted with his German clients that the

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receivership was the only sensible course, claimed in September that he had played no part in the decision to put the company in the hands of administrators whose job it was to insure that as many creditors as possible would be paid out of the assets of the company. While one of the receivers was a long-time Villard associate (indeed friend), the others were loyal to non-German investors like the Rockefellers. No one on the committee represented the Germans. By late August, however, Deutsche Bank had its own man on the scene with a clear mission to safeguard all German interests, not just those of Deutsche Bank, but his infl uence was limited. Only with German investors united behind the bank, could Deutsche Bank hope to coordinate an intensive, multi-year eff ort to salvage the interests of its customers. Meanwhile, Villard’s friend Siemens was convinced that the origin of the NP’s problems lay in the acquisition of several ancillary lines, especially the Wisconsin Central, for which NP had simply paid too much and in which Villard, suspiciously, had a fi nancial interest. Villard still had some infl uence over the receivers, though, and for this reason Deutsche Bank had to proceed carefully. During late August and early September, Villard remained virtually in hiding, leaving the briefi ngs to his assistant.33

In September, Siemens, whose personal reputation was on the line, left for a second and far less enjoyable trip to the United States. Meet- ing Villard was one of the fi rst points on his agenda. While defending Villard in public, Siemens’ stepson and biographer maintained that in private his stepfather accused Villard of violating his duties to Deutsche Bank by willfully neglecting to inform the bank of problems he simply could not have overlooked. Even Villard’s off ers to resign the previous spring refl ected, in Siemens’ opinion, only Villard’s fa- tigue and desire to return to Europe, not the company’s dire fi nancial straits. It is not clear what infuriated Siemens the most, Villard’s incompetence, his dishonesty, or his failure to inform Deutsche Bank before the public discovered NP’s predicament.34

Apart from the long-term ﬁ nancial issues facing the NP, creditors had to decide what to do with Villard who still had inﬂ uence with some of the investors, who were, in turn, highly suspicious of one another, management, and the receivers. Under no circumstances was Villard 33 Kobrak, Banking, 67-68. permitted to continue representing Deutsche Bank and the other Ger- 34 Various correspondence mans. By October Siemens had found an experienced banker, Edward between Deutsche Bank D. Adams (1846-1931), to represent the bank and help structure the and Villard’s offi ce, August, 1893, HADB, ultimate reorganization of the NP, a task that lasted many years. That A-1147.

KOBRAK | HENRY VILLARD 183 solution would incorporate many of Villard’s ideas, especially closer cooperation among adjacent and parallel lines, but not his absentee management style, his willingness to throw good money aft er bad (and convince others to follow suit), and most importantly his blindness to his and his managers’ conﬂ icts of interest.35

Retirement The NP’s fi nancial distress spelled the end of Villard’s business life. Apart from occasional consultations, his relationship with Deutsche Bank was at an end. Ever modest to the end, Villard claimed credit for the NP turnaround in his autobiography. According to virtually all accounts of the reorganization, he played virtually no role in the administration and refi nancing of the line aft er 1893, a feat that was accomplished by J.P. Morgan, Deutsche Bank, its representative, and several other investors who had, and wanted to have, nothing to do with Villard. Siemens, whose own reputation had been tarnished by his inability to control Villard, felt personally betrayed by Villard and disgusted by his passion for self-promotion and “ruthless pursuit of money.”36 Villard was tried for fraud and then sued for malfeasance by some investors, but he escaped all legal punishments. Some of the fi rms that he had established or controlled continued to exist. Though it remained a murky entity for investors and regulators, NAC, which accounted for a substantial portion a Villard’s own portfolio, still held NP securities and was undoubtedly involved in subsequent reorganizations into the new century.

According to his great-granddaughter, the recession and then collapse of the line cost Villard little of his personal fortune. She was probably right. He also probably proﬁ ted from the resurgence of the line in 1896, for which he claimed credit. In any case in 1893 at age 58, relieved of his business burdens, he could easily settle down to the life of a wealthy retiree, entertaining foreign dignitaries, writing a two-volume autobiography ninety percent of which dealt with his journalistic career, engaging in philanthropic work such as making substantial gift s to the University of Oregon and Columbia University in New York City, and enjoying his family. His great-granddaughter admittedly paints a somewhat rosy picture. He was still troubled by bad health and deafness, a condition he shared with his friend Edison. Horriﬁ ed by what he viewed as America’s imperialist war 35 Helff erich, Siemens, 258-59. with Spain in 1898, he preferred to stay in Europe for its duration. In November 12, 1900, back at his residence in Sleepy Hollow just north 36 Kobrak, Banking, 43 and 92-94. of New York City, Villard died surrounded by most of his immediate

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family; all but his daughter who was by then living in his native land. His long-time friends Edison, as well as his friends, journalists Carl Schurz and Horace White, attended the funeral.37

Conclusion Despite his many setbacks, Villard’s life was by any measure a grand success. Having arrived in the United States virtually penniless, he later lived in grandeur and enjoyed a happy family life. While enmeshed in business confl icts on both sides of the Atlantic, at one time or another he had been on familiar terms with the leading bankers, inventors, journalists, and politicians of his day. Some remained close to the end. His investments were both a measure of his fi nancial clout and his broad contacts and interests. He pioneered such diverse fi - nancial engineering tools as leveraged buyouts and mortgage-backed securities, well before they became common business buzzwords and even household terms. At the peak of his fi nancial power, Villard’s assets under management in the name of Deutsche Bank alone represented six percent of the bank’s entire assets in 1890, an amount in 2011 equal to approximately $94 billion dollars.

Many of his visions were realized: electriﬁ cation, the Paciﬁ c North- west’s economic growth, and for a while, even the combining of rival rail lines in the West. All these things came to pass, or prospered, as Villard had forecasted, but perhaps with less trauma without his untempered ambition and inconsistent commitment.

Perhaps, though, Villard’s long-term infl uence was greater in the political and social spheres of his life. Many of the currency and banking reforms that he had championed came to pass as American Progressives began to recognize that a more powerful government could serve as an eff ective counterweight to private initiatives and help insure fi nancial stability. Several American universities and cultural institutes, such as the Metropolitan Museum of Art and the Museum of Natural History, as well as churches and hospitals in his native land, benefi ted from his generosity. The newspaper he bought in the early 1880s, the New York Evening Post, which could trace its heritage back 80 years to Alexander Hamilton, remained for many decades a beacon for liberal ideas. Aft er Villard’s death, his son, Oswald Garrison, one of the founding members of the National Association for the Advancement of Colored People, continued to publish the paper, until 1918 when anti-German sympathies hurt circulation. Oswald kept its weekly supplement, The Nation, in print and turned it into one of the leading left -liberal magazines in 37 Life and Times of an Ameri- the United States. Although it is not clear that Oswald’s father would can Titan, 375-80.

KOBRAK | HENRY VILLARD 185 have supported all of his liberal reform causes, he would have been proud that his son continued to use the very special political and social connections of an insider to question basic tenets of, and contribute to, American society with the very special perspective of an outsider. Perhaps that is Henry Villard’s most profound legacy.

Christopher Kobrak is a Professor of Finance at the ESCP Europe in Paris. He is currently a Visiting Fellow at the Centre for Corporate Reputation at Oxford University.

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“A MOST REMARKABLE MAN”: ADOLPHUS BUSCH AND THE EVOLUTION OF THE AMERICAN BREWING INDUSTRY

Timothy J. Holian

Adolphus Busch — “A Most Remarkable Man”1 — arrived in St. Louis, Missouri, in 1857 as an unknown immigrant from German-speaking Europe. Aft er partnering with Eberhard Anheuser in an existing brewery in 1865, Busch transformed the operation, eventually known as the Anheuser-Busch Brewing Association, into the largest brewery in the world within a quarter of a century. Key to the eventual rise of Anheuser-Busch was the timely adoption of important scientifi c and technological innovations, an expansive sales strategy geared largely toward external domestic and international population centers, and a pioneering integrated marketing plan that focused on a single core brand, Budweiser, making it the most successful nationally- distributed beer of the pre-Prohibition era. Busch was able to lay the groundwork for his success by cultivating and catering to the extensive German-American population of St. Louis. As a primary Midwestern destination for German immigrants during the mid-nineteenth century, the city grew under their infl uence from 16,469 residents in 1840 to 451,770 a half-century later.2 In this city, a ready-made market for lager beer played to the strengths of Busch’s entrepreneurial spirit and encouraged the formulation of a farsighted vision of how beer could be made and sold beyond traditional local boundaries — most importantly, by utilizing the emerging national rail network and innovations in refrigeration to ship beer from St. Louis to distant markets. 1 Statement by U.S. Presi- dent William McKinley, The success of the Anheuser-Busch brewery meant that Adolphus while summarizing his personal meeting with Busch could pursue a lavish lifestyle rivaling that of Old World roy- Busch on the question of alty. Several mansions, in California and New York as well as in St. alcohol and regulation (qtd. in Roland Krebs and Louis, were needed to maintain his collection of furniture and fi ne art, Percy J. Orthwein, Making and to guarantee an opulent lifestyle for his family. A personal railcar, Friends Is Our Business: 100 Years of Anheuser- the Adolphus, transported Busch to preferred destinations across the Busch [n.p., 1953], 52). nation, and a private spur line was built to bring the coach virtually 2 Boston University, “Popu- to the back door of One Busch Place, his main family residence in St. lation History of St. Louis Louis.3 Busch also donated millions to charitable causes both inside from 1830-1990,” http:// physics.bu.edu/~redner/ and outside of the German-American community and gave small but projects/population/cities/ not inexpensive gift s to individuals with whom he crossed paths, in stlouis.html (accessed February 8, 2012). part to impress them with the wealth and success he had attained in the New World. Throughout his life, Busch made frequent return 3 Krebs and Orthwein, Making Friends Is Our trips to his German homeland, where he maintained the ethnic bonds Business, 59.

HOLIAN | ADOLPHUS BUSCH 187 that deﬁ ned much of his character.

Ultimately, Busch became one of the most high-profile German immigrants of the nineteenth century and the most successful German- American brewer baron nationwide. Upon his death, he had an estate valued at up to $60 million Figure 1: A vintage (approximately $1.36 billion in 2010),4 substantial holdings in sev- postcard off ering an aer- eral companies other than Anheuser-Busch, and a lengthy list of ial view of the Anheuser- Busch brewing plant in benefi ciaries who gained from his propensity to give both time and St. Louis, 1910. The image money to community-minded endeavors. Although never a member conveys the bustling activity on the grounds and of St. Louis high society, Adolphus was lauded aft er his death as streets. Courtesy of the the city’s foremost ambassador, its best-known entrepreneur. Ac- Anheuser-Busch Archives. cording to the St. Louis Post-Dispatch, in Busch’s passing, the world “lost a singular example of successful enterprise coupled with high integrity.” “St. Louis,” the paper continued, “lost a big private citizen actively identifi ed with a half century of its growth and thousands of 5 4 The current and subsequent men and women and children have lost a good friend.” fi gures citing 2010 dollar values relative to the original money amount have been cal- Family Background and Ethnic Identity culated in terms of the annual Consumer Price Index for the The birth of Adolphus Busch on July 10, 1839, in Kastel, Hesse- United States, via the Measur- ing Worth website, http:// Darmstadt, was announced to the public the next day by his father, www.measuringworth.com/ Ulrich Busch Sr. (1779-1852), during a visit to the city’s mayor.6 The datasets/uscpi/result.php (accessed February 20, 2012). formality of the gesture spoke to the societal standing of Ulrich, an elder lord of the Rhine River city. Adolphus was the twenty-fi rst of 5 St. Louis Post-Dispatch, Oc- tober 11, 1913, as cited in twenty-two children fathered by Ulrich with two wives: his fi rst wife, Krebs and Orthwein, Making Catharina, bore fi ve boys and two girls before her death on April 16, Friends Is Our Business, 78. 1815, while his second wife, Barbara Busch, neé Pfeiff er (1792-1844), 6 August A. Busch, Busch family gave birth to eight boys and seven girls before passing away on March history, dated July 25, 1940, in the Missouri Historical So- 12, 1844. By the end of the 1830s, Ulrich Busch had established himself ciety, as cited in Peter as an infl uential member of the German merchant class, with substan- Hernon and Terry Ganey, Under the Infl uence: The tial fi nancial holdings derived from lumber harvested on his extensive Unauthorized Story of the wooded property, a successful inn and tavern operation, and real es- Anheuser-Busch Dynasty (New York, 1991), 20. tate interests including vineyards, some of which had been cultivated

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since Roman times.7 A strong sense of traditional values shaped the upbringing of Adolphus and the other Busch children, and the Catholic family placed particular emphasis on discipline, thrift , loyalty, and hard work. It should be added, however, that these values were cultivated alongside practices that stressed Rhineland conviviality. For instance, one proverb governing the Busch home maintained that “eating and drinking hold body and soul together.” The Busch family’s three-story mansion, the Schützenhof, was located in a proliﬁ c wine-growing region, and drink culture, in general, and vinous spirits, in particular, played an important role in Adolphus’ early life and continued to shape his later years as well. Although he went on to become one of the most successful brewery owners in history, Busch always maintained a preference for wine over beer when it came to his own consumption.

Ulrich Busch’s economic success guaranteed superior schooling for young Adolphus. Aft er receiving his elementary education in Mainz 7 Hernon and Ganey, Under and Darmstadt, Adolphus attended school in Brussels, where he the Inﬂ uence, 21. studied French and English among other subjects. To gain work 8 A decade later, on Febru- experience, the younger Busch eventually took up employment in ary 19, 1867, Busch re- his father’s lumber enterprise, raft ing logs down the Rhine and Main nounced his allegiance to the Grand Duke of Hesse- rivers. He also served brieﬂ y as an apprentice at a brewery belonging Darmstadt and became a to an uncle. Aft er Ulrich Busch died at age seventy-two in July 1852, United States citizen.

Adolphus was forced to chart his own course in life and to channel 9 Hernon and Ganey, Un- his energies into more enduring business ventures. In 1856, at just der the Infl uence, 23, 31. Over the years, Adolphus seventeen years of age, he began working as a shipping clerk at a Busch and the Busch fam- mercantile house in Cologne. Although he only remained in this ily proudly maintained numerous hallmarks of their position for a year, the experience proved formative for Busch: it was heritage. For instance, the there, in Cologne, that he developed the skills and character traits family frequently used the German language in private (e.g., energy, enthusiasm, an eye for opportunity) needed to realize and social settings, and Adolphus proved unwill- his existing ambition to make money and accrue wealth. His desire ing to alter or minimize to maximize his own potential, the unlikelihood of his inheriting a his thick German accent. Moreover, the family of- substantial portion of his father’s estate as the second-youngest son, fered fi nancial and other and favorable reports about immigrant life in the United States from support to German- American organizations his brothers George, Ulrich, and John, prompted Adolphus to leave and charities based in Europe in 1857 and take up residence in America.8 Although Busch St. Louis and elsewhere. They also collected artwork chose to make America his new homeland, his journey was by no by German masters, made means a fi nal farewell to the Old Country. In the coming years, Busch regular trips back to and around German-speaking took many trips to Europe, generally, and to Germany, specifi cally, Europe, and consumed including more than twenty trips to his former hometown.9 German foods and beverages, most notably German white wines from Aft er arriving at port in New Orleans, Louisiana, eighteen-year-old the Moselle and Rhine Adolphus made his way to the American Midwest, where he found a regions. See Hernon and Ganey, Under the Infl uence, hospitable environment both personally and professionally. Among 47-49.

HOLIAN | ADOLPHUS BUSCH 189 his brothers, George had already established a thriving enterprise as a hop merchant, while John, who came to America in 1849, had founded a brewing operation in Washington, Missouri, in 1854. Fift y miles to the east, St. Louis beckoned Adolphus as a rapidly emerging German settlement that was well on its way to becoming part of the famed “German Quadrangle,” an area that also included Cincinnati and Mil- waukee, among other cities. Busch thrived on the immigrant culture that pervaded St. Louis, and he quickly realized that the knowledge, habits, and skills he had acquired in his Rhineland youth could help him make the most of certain business opportunities that were typical of river cities everywhere. Adolphus found early employment as a “mud clerk” and was tasked with assessing cargo aboard incoming Mississippi River steamships. Possessed of a keen eye, he also pursued private opportunities to buy and sell the commodities that these ships carried. Whereas many German immigrants of the era maintained a hardscrabble existence until becoming established, a “substantial al- lowance” of family money allowed Adolphus to enjoy a brief period of acclimation before getting to work. As he acknowledged later in life, his initial weeks in St. Louis were not given over to intense labor so much as to “hunting, loaﬁ ng, getting acquainted and having a good time.”10

To amass additional fi nancial resources, Busch worked briefl y at a St. Louis supply house owned by German immigrant William Heinrichshofen (1825-1906). Thereaft er, he used his earnings and existing funds to enter into a partnership with Ernst Wattenberg (1835-1911) to sell brewing supplies. The new fi rm — Wattenberg, Busch & Company — was ideally situated in both time and place for success. The rapid rise in German immigration to St. Louis had spurred a population explosion: within a decade, the city’s population had more than doubled, going from 78,000 residents in 1850 to 185,000 in 1860. Many of these newcomers brought with them a taste for a relatively new style of beer — lager — which originated during the 1840s in Central Europe. The brew got its distinct character from a

10 Walter B. Stevens, Eleven special bottom-fermenting strain of yeast that yielded a smoother, Roads to Success (St. Louis, crisper, more refreshing ﬂ avor than traditional top-fermented ales. 1914), 21, as cited in Hernon and Ganey, Under the Inﬂ u- The unique taste also resulted from an extended aging and maturation ence, 23. period in a cool, subterranean environment. The spread of lager beer

11 Daily Missouri Republican, saw a marked increase in the number of St. Louis breweries that were May 30, 1860, as cited in eager and willing to serve a clientele accustomed to consuming copious Henry Herbst, Don Roussin, and Kevin Kious, St. Louis quantities of the beverage, from twenty-four in 1854 to forty just six Brews: 200 Years of Brewing years later, thirty-two of which were owned and operated by individuals in St. Louis, 1809-2009 (St. Louis, 2009), 37. of German stock.11 Abundant natural resources also played a vital

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role in St. Louis’ blossoming brewing trade, which beneﬁ ted from an ample supply of quality water nearby in the Mississippi and Missouri rivers and from suitable hills for caverns for aging lager beer. During the hot summer of 1860, thirsty German-Americans and other residents of St. Louis combined to imbibe 212,000 barrels of beer, generating $1.5 million in revenue (approximately $40.6 million in 2010) for the brewer barons who spent one dollar to manufacture each barrel that they then sold for as much as eight dollars to area tavern keepers.

One enterprising brewer of this era was Eberhard Anheuser (1806- 1880), a St. Louis resident and German immigrant who had used his profi ts from a prosperous soap manufacturing business to purchase the struggling Bavarian Brewery (soon renamed the Bavarian Brewery, E. Anheuser & Co.) in 1860.12 At the time, the Bavarian Brewery was fortunate in being able to market to a large number of German and Central European immigrants. This advantage, however, was more than off set by the competition that had been unleashed by the recent spike in the number of St. Louis brewers. Even more importantly, though, the Bavarian Brewery faced an extremely fundamental problem: by all accounts, its beer was mediocre, a major handicap in a city fi lled with experienced lager consumers and no lack of brewers who produced a consistently superior product. But if Anheuser was bur- dened by the challenges associated with running an underachieving brewery, the venture remained profi table for Busch, who continued providing the company with brewing supplies from his offi ce, which was located right around the corner from the Anheuser soap works.

It soon became clear that Anheuser’s brewery wasn’t the only thing that had captured Adolphus’ attention. As he became better acquainted with the fi rm and with Eberhard Anheuser personally, Busch also became increasingly attracted to his sixteen-year-old daughter, Elisa (1844-1928), known among friends as Lilly or even “the curly head” 13 12 Todd Barnett, “Eberhard [der Lockenkopf] in reference to the prominent blond curls in her hair. Anheuser,” in IE. Aft er a period of courtship, Busch proposed to Lilly. His off er was ac- 13 Frank Leslie’s Illustrated cepted, and the wedding was set for March 7, 1861 — three days aft er Newspaper, January 11, the inauguration of Abraham Lincoln — at the Holy Ghost German 1890, as cited in Hernon and Ganey, Under the In- Evangelical Lutheran Church. The service was particularly memorable fl uence, 26. insofar as it represented the marriage of more than one Anheuser and 14 St. Louis Republic, Octo- Busch: for some time, Adolphus’ older brother, Ulrich, had been dating ber 11, 1913; St. Louis another daughter of Anheuser, Anna, and during the service Ulrich and Post-Dispatch, March 8, 1911; Alice Busch Tilton, Anna were wed as well. The double wedding, unique as it was, did not Remembering (St. Louis, come off entirely without incident, as Adolphus arrived twenty minutes 1947), 1-2, as cited in Hernon and Ganey, Under late, citing the need to close an important business deal beforehand.14 the Infl uence, 26-27.

HOLIAN | ADOLPHUS BUSCH 191 The marriage between Adolphus and Lilly was scarcely a month old when the reality of a nation at war took priority. Aft er the fall of Fort Sumter on April 12, 1861, Busch, along with his father-in-law, willingly took up arms to help keep Missouri from coming under Confederate control. Ultimately, Busch spent three months as a corporal in Company E of the 3rd Regiment of the U.S. Reserve Corps. He served alongside some 5,000 volunteers and 1,200 reservists, including Eberhard Anheuser, who was also a corporal in Charlie Company.15 By the time the enlistments of the homeguard had expired in August 1861, both Anheuser and Busch had reprised their normal personal and professional roles. For Adolphus, that meant a return 15 Robert J. Rombauer, The Union Cause in St. Louis in to work in the brewery supply business, as well as the beginning of 1861 (St. Louis, 1909), what would become a sizeable family. Aft er taking in Gustava von 441-45, as cited in Hernon and Ganey, Under the Infl uence, 27. Kliehr, the orphaned daughter of one of Lilly’s sisters, Lilly herself gave birth to their fi rst child, a girl, Nellie, on April 12, 1863. By the 16 Busch family history by Au- gust A. Busch, Jr., Missouri end of 1865, she had given birth to two sons as well: Edward, born Historical Society, and St. in 1864, and August A., born four days aft er Christmas in 1865. Over Louis Post-Dispatch, May 22, 1905, as cited in Hernon and the next eleven years, Lily gave birth to eight more Busch children: Ganey, Under the Infl uence, Adolphus Jr. (1868), Alexis (1869), Emilie (1870), Edmee (1871), Peter 28, 32. (1872), Martha (1873), Anna (1875), and Clara (1876), although three 17 In the case of the Bavarian of the girls — Emilie, Alexis, and Martha — died shortly aft er birth.16 Brewery, E. Anheuser & Co., the “Company” was in fact With the goal of male heirs and potential future business leaders at- William D’Oench, as a silent tained, Adolphus focused more intently on entrepreneurial matters partner. In the years aft er D’Oench sold his share in the and sought out opportunities that, unbeknownst to him at the time, brewery to Adolphus Busch, would make him one of the wealthiest and most admired industrial- the latter was fond of remind- ing him what he had given up ists in the United States by the end of the century. on. Similarly, Busch liked to emphasize how the brewery had been transformed under his leadership. For instance, Business Development in 1899, Busch wrote the following lines to D’Oench in a The end of the Civil War marked a turning point in the life of Adol- piece of private correspon- phus Busch, particularly when it came to the professional endeavors dence: “I wish we might have the pleasure of seeing you that would eventually defi ne him. During the war years, Busch was here in St. Louis again, so we one of the relatively few St. Louis businessmen who braved the could have the opportunity of showing you the greatest and uncertainty of the era and took a chance on dealing in cotton and largest brewery in America, other Southern products. Through the skillful and effi cient buying in which you were once half owner. . . . Now do you recol- and selling of commodities, Busch earned substantial profi ts and lect what I paid you for your positioned himself to invest in other commercial ventures when half interest?” See Adolphus Busch to William D’Oench, peace returned to the nation. In 1865, the year the war ended, Busch personal correspondence, acquired a stake in the Bavarian Brewery by buying out the inter- Charles Sitton Collection, as 17 cited in Hernon and Ganey, ests of Eberhard Anheuser’s then-partner, William D’Oench. As Under the Infl uence, 28; and Anheuser’s new partner for the future, Busch devoted himself to Herbst, Roussin, and Kious, St. Louis Brews, 32. improving the fortunes of the company. To learn as much as possible

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about the brewing process, Busch read industry journals and other brewery-oriented publications whenever he could, and from 1868 onward he made frequent trips to German-speaking Europe to study brewing techniques and technical innovations, in the hopes of gaining an advantage over his local competitors.

Although Busch had no hands-on experience as a brewer, he had a basic general knowledge of the brewing industry, years of commercial experience, and innate business instincts — all of which he put to good use. He quickly gained a reputation as an adept salesman who “sold the bad almost as facilely as he sold the good.”18 No less important was Adolphus’ attitude toward hard work, which he saw as “pleasure and agreeable recreation,” whose payoff , beyond fi nancial reward, was the satisfaction he felt when his eff orts were “crowned with success.”19 To improve business, Busch seized upon various gim- micks designed to give the brewery and its product greater exposure. Mindful that name recognition was critical in a crowded marketplace, he believed that any publicity, good or bad, was better than no public- 18 Gerald Holland, “The King ity. By giving free beer to customers, paying saloonkeepers to stock of Beer,” American Mercury Magazine, October 1929, Anheuser and Busch brews instead of competitors’ beer, and send- as cited in Hernon and ing agents to existing draft accounts to buy free rounds for patrons, Ganey, Under the Infl u- ence, 29. Adolphus put his product in the public eye, building an awareness of his beer that would persist for years to come. 19 Adolphus Busch, correspondence with Charles Nagel, December 8, In 1865, the year that Busch bought his way into the Bavarian Brewery, 1909, as cited in Hernon the fi rm was struggling to manufacture and sell 4,000 barrels of beer and Ganey, Under the Infl uence, 29. per year.20 Undeterred by the company’s problems, Busch surveyed 20 Insight into the challenges the business climate and noticed a unique set of circumstances that that Busch confronted promised to support the successful operation of a brewing enter- in building up the small Anheuser/D’Oench brew- prise on an unprecedented scale. First, the dramatic growth of the ery can be gleaned from German immigrant population had created an enormously expanded statistical data from the period. According to a customer base, and, as importantly, a ready supply of inexpensive May 30, 1860, report but capable labor. Second, the advent of the Industrial Age promised by the Daily Missouri Republican, just before new technology that would revolutionize breweries and make them Eberhard Anheuser more cost-eff ective to operate every year. Third, new transportation purchased the Bavarian Brewery it ranked only networks, most notably railroads, opened up distant markets and al- twenty-ninth out of forty lowed beer to be shipped farther, and faster, than ever before. Fourth, operational breweries in the city, with a meager government regulation was in its infancy and thus promised few output of 3,200 barrels impediments to profi t-taking and reinvestment in the business.21 At per year (cited in Herbst, Roussin, and Kious, St. the time, beer brewing seemed to off er unlimited potential to virtu- Louis Brews, 9). ally anyone with ambition and energy; the challenge, however, was 21 Hernon and Ganey, Under fi nding the means to ensure success. the Infl uence, 29.

HOLIAN | ADOLPHUS BUSCH 193 As a ﬁ rst step toward expansion, Busch sought ﬁ nancial backing from a group of prominent French bankers in St. Louis, but was rejected for a $50,000 loan (approximately $690,000 in 2010). Apparently, Busch — whose offi ce already possessed a level of opulence out of keeping with his business’ limited success22 — was deemed too extravagant and thus a poor risk as a money manager. So Busch went elsewhere and secured the requisite loan from State Bank president Robert A. Barnes (1808-1892). With an extended line of credit, Busch commenced construction of a new brew house, a malt house, and additional storage cellars. The addition boosted the brewery’s capacity to 25,000 barrels per year. The investment proved wise: Bavarian Brewery beer production grew by 300 percent between 1865 and 1870.23

22 An 1878 descriptive account revealed the extent to which But Busch realized that unless the quality of the Anheuser and Busch Busch decorated the brew- beverages could be greatly improved, the expansion would only result ery offi ces generally, and his own specifi cally, in an eff ort to in the production of greater volumes of subpar beer. To address this leave visitors with a profound problem, Adolphus took a series of trips to Europe, where he stopped impression of success and prosperity: “The offi ce is one in Paris, Bohemia, and Bavaria. He benefi tted from private guided tours of the fi nest and most taste- of numerous breweries and gained much useful knowledge through fully appointed of any in the city, and bears the characteris- fi rst-hand observation of important innovations that had yet to reach tics of the president’s offi ce of the United States. Busch’s improved understanding of the brewing pro- a large bank. It is Gothic in the exterior, with small Doric Sky- cess, together with the hiring of greater numbers of skilled brewmasters, lights and modern windows, helped the company’s beers achieve the desired level of quality. More and antique decorations. The fl oor is of tessellated marble, important, still, was the company’s introduction of pasteurization, a and the furniture is of the most exquisite workmanship, process whereby fi nished beer slated for bottling and shipping to exter- and elegantly veneered. The nal markets was subjected to heat in order to kill harmful bacteria that private offi ce of Mr. Adolphus Busch, the Secretary and caused spoilage. During a trip abroad, the marketing-minded Busch Manager of the Association, had taken note of the scientifi c advances made by Louis Pasteur in the is simply sumptuous, with its beautifully designed and area of wine stabilization, and he returned to Missouri with the idea immaculate marble mantel, of applying them to his bottled beer trade.24 Axminster carpets, ornamented French plate glass, luxurious chairs, elegant paintings, etc. 24 In subsequent years, hyperbole of the era, one with a body and a charac- In addition to its handsome Anheuser-Busch adver- company advertisement of ter smacking and vigor- appointment, the offi ce is tisements stressed the the 1890s maintained that ous. Its eff ect is buoyant, provided with every possible company’s role as the “the diff erence between refreshing, and invigorat- convenience, including a large fi rst brewery in America corn beer and fi ne barley- ing. ANHEUSER-BUSCH iron vault for valuables, lava- to introduce pasteurized malt beer is the diff erence brands are absolutely free tories, toilet rooms, etc., with bottled beer. Under the between corn bread and from corn or corn prepara- an arrangement for expediting slogan “Not How Cheap fi ne white bread. . . . Of tion. Nothing but highest business unsurpassed.” See but How Good,” advertise- corn beer you can drink grade malt and hops are “75 Years Ago . . . In Spirit the ments also emphasized but little without a protest used in its preparation.” Same Today,” Brewers Digest various attributes of the from the stomach, and the See “Anheuser-Busch (September 1952), 70. company’s brews. With eff ect is a loss of energy, Brewing Ass’n, St. Louis, regard to product qual- weariness, stupidity, and Mo., U.S.A., Brewers of 23 Hernon and Ganey, Under ity, specifi c emphasis was drowsiness. The barley- Fine Beer Exclusively” the Infl uence, 30-31. See also placed on the absence malt beer, however, is a (advertisement), in Frank Stevens, Eleven Roads to of corn as a fermentable sparkly, spunky, healthy, Leslie’s Illustrated Weekly, Success, 26. article. With the typical quickly assimilating drink, November 17, 1892, 353.

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The introduction of pasteurization was part of Busch’s plan to circumvent St. Louis’ intense local competition by shipping his beer to ever-distant markets with greater sales potential. In 1872, aft er becoming the fi rst brewer in the United States to produce pasteurized bottled beer, Busch was poised to take the lead in the race among brewers to tap into the increasingly lucrative southern and western markets. Bolstered by the establishment of icehouses and warehouses strategically placed along key railroad lines, the company enjoyed signifi cant business growth during the 1870s, boosting its beer output to 44,961 barrels by the end of 1877 — a production level that transformed this once-miniscule operation into the thirty- 25 Hernon and Ganey, Under second largest brewer in the nation. In 1882, in recognition of this the Infl uence, 32; Herbst, achievement, industry observers dubbed Adolphus Busch the “fa- Roussin, and Kious, St. Louis Brews, 34; Stanley ther” of lager beer bottling. In truth, bottled beer had existed for over Baron, Brewed in America: a century, and its national market share, at less than ten percent, The History of Beer and Ale in the United States was tiny in comparison with draft beer as sold by the tavern trade. (Boston, 1962), 59, 242-46. For his part, Busch was not shy about taking credit for his innova- The fact that beer production rose seventeen per- tions. In a brewery promotional pamphlet dating from around 1887, cent from 1876 to 1877 he claimed that Anheuser-Busch could “point with honest pride to suggests that Anheuser- Busch rail shipments of the marvelous change wrought by it in a few short years by virtually beer to locations outside creating a new and important industry, a source of national wealth, of St. Louis had a big impact on the company. See giving employment to many thousand citizens, and proving the main “75 Years Ago . . . In Spirit factor in stimulating and developing the manufacture of bottles, the Same Today,” Brewers Digest (September 1952), corks, labels, wires, etc., to such extensive dimensions as the most 63. While Adolphus Busch sanguine and hopeful never dreamed of.”25 was by no means the fi rst brewer to bottle beer, he is widely recognized as the fi rst American brewer to Professional Innovation and Market Dominance do most of his own bottling. The more standard During the 1870s, Adolphus Busch began to reap the personal re- practice of the day was to keg draft beer and ship it wards of his business success. In 1873, he became a full partner in the to external markets, where brewery, which in 1875 was renamed the E. Anheuser Co.’s Brewing local bottlers poured the 26 beer into glass bottles and, Association. The brewery was incorporated that same year, with 480 when applicable, labeled shares of stock issued at a value of $240,000 (approximately $4.92 them before sending them off for distribution and re- million in 2010). As president of the company, Eberhard Anheuser tail sale. received 140 of them, with another 100 held in trust for his daughter 26 Herbst, Roussin, and Kious, Lilly and, by extension, Adolphus. Brewmaster Erwin Spraul held two St. Louis Brews, 34; Dale P. shares in honor of his vital role in the business, but the remaining Van Wieren, American Breweries II (West Point, 238 — just slightly under an outright majority — went to Adolphus 1995), 188. in recognition of the services he had rendered in the past and his 27 Krebs and Orthwein, 27 potential for leadership in the future. That the fi rm’s future would Making Friends Is Our ultimately depend on Busch was obvious to insiders and outsiders Business, 33; Hernon and Ganey, Under the Infl u- alike. For example, in 1878, a group of local commentators described ence, 33.

HOLIAN | ADOLPHUS BUSCH 195 Adolphus Busch and his rapid rise to prominence within St. Louis business circles:

Mr. Busch, who is the representative head of the Anheuser Brewing Company, is a comparatively young man and a gentleman of the most aff able disposition, but his ability as a business man ranks as high as that of any in St. Louis. He not only thoroughly understands the brewing business, but also combines a practical and original knowledge which, in its utility, places him in the advance of his competitors, and 28 J.A. Dacus and James W. Buel, A Tour of St. Louis (St. Louis, makes them his imitators. He has entire control of the 1878), as cited in “75 Years Ago . . . In Spirit the Same To- brewery, directs its business, makes all the contracts, han- day,” Brewers Digest (Septem- dles its funds and carries all its responsibilities on his own ber 1952), 71. The fulsome praise heaped upon Adolphus shoulders. The success of his management . . . ranks him Busch in the original publi- among the best commercial men of the West.28 cation was typical of the era; fl attering portrayals of successful business magnates In 1879, the name of the company was changed to the Anheuser- were oft en penned by writers and editors with fi nancial in- Busch Brewing Association in honor of Adolphus’ contributions to terests in the success of vari- the fi rm, and any remaining questions about the power structure ous fi rms. Occasionally, such copy was even provided by the at the brewery were settled on May 2, 1880, when Anheuser passed fi rms themselves, as a paid away aft er a three-year illness. His stock shares were transferred to promotional eff ort to craft its image within the local his fi ve surviving children, but none of them was suited to a position community. of responsibility at the brewery. With the additional shares that ac- 29 Edwin Kalbfl eish, “Anheuser- crued to Lilly, Adolphus Busch obtained full control of the company, Busch Financial History,” and for the next 128 years, Anheuser-Busch remained fi rmly within September 18, 1951, Charles Sitton Collection, as cited in the Busch family.29 Hernon and Ganey, Under the Infl uence, 33; Krebs and Orthwein, Making Friends Is Steadily increasing beer sales gave Busch the freedom to improve Our Business, 20. In subse- and expand the physical structure of the brewery, which he did, quent years, Adolphus and Lilly Busch consolidated their knowing that reinvesting a substantial portion of the company’s control over the business by profi ts would lead to an even greater return later on. Faced with a acquiring as much stock as they could, sometimes going brew house that was functionally obsolete relative to the expansive to considerable lengths to do goals of the fi rm, Adolphus approved the construction of a new so: in one case, for instance, they paid a family member facility that was capable of signifi cantly higher production. With an $60,000 for a single share. eye toward public relations, he settled upon a design resembling a Ultimately, Busch was able to increase his stake in the busi- castle. Large and imposing on the outside, the facility possessed an ness from 238 to 267 shares, interior opulence that partially belied its industrial purposes and while Lilly boosted her holdings from 100 to 116. See conveyed a grandiose impression of importance and authority. Busch Maxine Sylvia Sandberg, “The also ordered the construction of a bottling plant that soon produced Life and Career of Adolphus Busch,” Master’s thesis, Uni- 100,000 bottles per day, the largest capacity in the nation. Another versity of Texas, 1952, 68, as signifi cant improvement to the physical plant was the addition of an cited in Hernon and Ganey, Under the Infl uence, 34. ice house featuring a mechanized refrigeration system, one of the fi rst

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in the nation to be installed on such a large scale. It was an expensive venture, but Busch correctly foresaw the advantages of artifi cial cooling. Buildings outfi tted with such equipment freed the brewery from using caves, with their limited space, for aging and storing lager beer for extended periods. Likewise, mechanized refrigeration spared the brewery the trouble and expense of harvesting, shipping, and storing large, unwieldy chunks of ice. Construction and maintenance costs were reduced, and more accurate temperature levels could be achieved, allowing for better quality control within the brewery setting.30 In 1876, Busch expanded his use of artifi cial cooling through the purchase of fi ve refrigerated railcars for export shipments, the fi rst such fl eet of refrigerated shipping units for beer in the nation.31 Up to that point, “refrigeration” usually entailed packing ice blocks into 32 Vollmar, Budweiser: The boxcars — a process that sometimes left perishable meats and dairy Early Years, 4. See also Herbst, Roussin, and Kious, products insuffi ciently chilled and oft en rotted the wooden fl oors over St. Louis Brews, 37. time, leading to higher maintenance and replacement costs. In the 33 The concept of brand new Busch cars, however, ice and other coolants such as ammonia marketing is understood were stored in special containers and tubing, which meant that the much diff erently today than it was in the years refrigeration was both more uniform and longer-lasting for extended prior to Prohibition, when trips to distant markets. The idea proved highly successful: by the the product line of a given brewery was defi ned by end of the next year, Busch operated forty refrigerated railcars, and the style of the brew — by 1888 the fl eet had expanded to 850.32 such as Kulmbacher, Wiener, Bohemian, Pilsener, Dortmunder, and At the same time that Busch acquired his fi rst refrigerated rail cars, of course Budweiser — rather than by a specifi c the beer that would revolutionize the fortunes of the brewery — and, name. Only in the post- by extension, the entire American brewing industry — was added to Prohibition era did the 33 concept of distinct product the company product line. At the beginning of 1876, the E. Anheuser names emerge for the vari- Co.’s Brewing Association marketed sixteen diff erent beers, including ous beers and ales made by American breweries. Standard, Pilsener, Pale Lager, Burgundy, Liebotschaner, Erlanger, In the case of Anheuser- and Faust, the last being named aft er Tony Faust, a St. Louis Busch, Budweiser output was augmented during saloonkeeper and personal friend of Eberhard Anheuser in the 1850s. the fi rst fi ft y years aft er None was able to occupy a distinct niche in the marketplace — and repeal by the introduction of the popular brands to a certain extent, they actually cut into each other’s sales and Michelob and Michelob Light, Busch, and Anheuser-Busch Natural 30 William J. Vollmar, Bud- or regional basis, but not Anheuser-Busch success- Light (later simply Natural weiser: The Early Years (St. necessarily to foreign fully extended its mar- Light). Additionally, there Louis, n.d.), 3; Hernon nations or territories. Such ket presence abroad as were also line extensions and Ganey, Under the In- markets for Anheuser- well — by 1895, Mexico, of the Budweiser name, fl uence, 34. Busch during the mid- to Brazil, Australia, and including Budweiser Bock, late- nineteenth century England were among Budweiser Malt Liquor, 31 In the parlance of the included Texas and New those countries receiv- and Budweiser (Bud) Light, times, “export” ship- Orleans to the south, ing regular shipments as well as later (and oc- ments were those of beer San Francisco to the of Budweiser beer. See casionally short-lived) en- sent to markets outside of west, and New York and Krebs and Orthwein, Ma- tries such as Bud Dry, Bud the customary sales range Philadelphia to the east, king Friends Is Our Busi- Ice, Budweiser Select, and of the brewery on a local among others. Over time, ness, 33. Budweiser American Ale.

HOLIAN | ADOLPHUS BUSCH 197 prevented the development of a comprehensive marketing eff ort geared toward a single dominant brand. In search of a distinctive beer that would achieve widespread public appeal, Busch looked toward Central Europe to a brewing style that he had come to know in the course of his travels. For years, Bohe- mian brewers had produced Pilsener beer, as craft ed in the city of Pilsen. Made with the region’s characteristically soft water and with specially-chosen area grains and hops, Pilsener was carefully aged in cool under- ground cellars that allowed for kräusening, a secondary fermentation process that naturally carbonated the beer. The result was a crisp, clean, lightly bitter brew of refreshing and pleasing character. During a trip to the region with his good friend, the liquor importer/bottler Carl Conrad, one particular brand caught Adolphus Busch’s attention: Figure 2: Framed litho- Budweiser, which was made by a brewery in the town aft er which graph of a scene in a railroad restaurant car, 1904. it was named — Budweis — approximately eighty-fi ve miles south- Courtesy of the Anheuser- east of Pilsen. The beer was sold in many parts of German-speaking Busch Archives. Europe and even on a limited basis in the United States, where it 34 Cited in Vollmar, Budweiser: was marketed in New York on import under the Budweiser moniker. The Early Years, 6. In 1878, Carl Conrad trademarked the Budweiser name under Back in America, later in 1876, Conrad contracted with the E. Anheuser the auspices of his work as & Company brewery to make and sell Budweiser for his distribution an importer of wines and liquors. Although Busch as an upscale product. They decided to package it for shipment in obtained the American bottles with foil covering a wire-wrapped cork closure, the idea being trademark for Budweiser in 1882, a confl ict with the to invoke the image of fi ne champagne. They also used the most desir- Czechoslovakian brewer of able ingredients they could procure to brew it. The result, according Budweiser over production and distribution rights in to Busch, was a “very pale, fi ne beer, paler than in ordinary use and Europe persisted well made from German malt and hops.”34 Marketing played a key role in into the twentieth century. See Hernon and Ganey, establishing the brand, with Busch choosing the name Budweiser Under the Infl uence, 38, for a concise overview of the legal issues involved » in the United States in the brewed by the tiny Du- legal battle between in the dispute up to 1991. pre-Prohibition era, most Bois Brewing Company of the two fi rms to an end For years, Budweiser was notably one by Busch’s DuBois, Pennsylvania — with an exclusivity ruling understood as a style Milwaukee-based archri- survived legal challenges in favor of the St. Louis of beer rather than a val Schlitz. The vast ma- from Anheuser-Busch and corporation. See “Bud- brand name; and for this jority of these failed to lasted into the modern era, weiser Trade Name Fight reason, there were numer- endure the dry years, and at least until September Ended,” Greeley Daily ous brews with this moni- aft er repeal only one such 30, 1970, when a judge Tribune, October 1, ker on the market » beer — DuBois Budweiser, brought a sixty-fi ve-year 1970, 23.

198 GHI BULLETIN SUPPLEMENT 12 (2016) The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

because of its familiarity to native speakers of German but also because of its ease of pronunciation for non-Germans. Thus, the name was chosen to appeal to German immigrants, native-born Americans, and immigrants from other countries.35 Recognition came quickly for the brand, which was referred to early on as the “world renowned Conrad’s Budweiser Beer” and was shipped from its St. Louis base of manufacture to restaurants as far away as Denver and New York. In its fi rst year of production, Budweiser sales amounted to 225,342 bottles, a fi gure that grew tenfold to 2.3 million bottles in 1880.36 Figure 3: Anheuser-Busch Eagle Logo, introduced Despite Budweiser’s success, by the end of 1882, Conrad was facing in 1872. Courtesy of Anheuser-Busch Archives. severe fi nancial diffi culties and had to declare bankruptcy; among » the Budweiser label) set it his outstanding debts was $94,000 (approximately $2.07 million in apart from other brewing 2010), payable to the Anheuser-Busch Brewing Association. Keenly operations of the day. From 1875 to 1880, roughly the aware of the business opportunity in front of him, Busch negoti- period when Anheuser- ated the acquisition of the Budweiser brand from Conrad, under the Busch began making Bud- weiser and saw company premise that the Budweiser name and the established reputation of production grow almost the product far outweighed the debt that he owed to the brewery.37 sixfold to well over 100,000 barrels per year, beer out- It would prove to be one of the most foresighted transactions in put nationwide rose by only 28.6 percent, with the aver- American business history: in Budweiser, Busch obtained the sig- age brewery growing from nature brand that catapulted his brewery to national dominance and just 3,414 barrels manu- 38 factured (1875) to 4,852 international fame. (1880). The small market share for Anheuser-Busch beers generally and Bud- 35 Although Budweiser was initial sales success, but bankruptcy forced Conrad weiser specifi cally is best ex- the fl agship beer of also in the knowledge that from his business as a plained by the total output of Anheuser-Busch for over a generically-named bev- distributor, but his close the large number of com- a century, it is interesting erage like St. Louis Lager personal relationship peting breweries scattered to note that, unlike some could be made by any St. with Adolphus Busch across the country at that other Anheuser-Busch Louis brewer. This being guaranteed his employ- time. The number thereof — brews, it was never adver- the case, it lacked the dis- ment at the Anheuser- despite being in slight de- tised with a specifi c em- tinctiveness that Adolphus Busch Brewing Asso- cline, from 2,783 (1875) to phasis on its St. Louis ori- Busch needed to realize ciation for the next four 2,741 (1880) — still dwarfed gins. This suggests that it his goals of widespread decades, until his death the number a century later. was always intended more brand name recognition in 1922. See also Hernon For instance, in 1980, near for national and interna- for the brewery in exter- and Ganey, Under the In- the peak of Anheuser- tional distribution than lo- nal markets. See Herbst, fl uence, 37. Busch’s market dominance, cal consumption. In fact, Roussin, and Kious, St. just 101 breweries, under by the 1880s, the Bud- Louis Brews, 37. 38 Although total Anheuser- the control of forty-nine dif- weiser brand had replaced Busch market share na- ferent fi rms, operated na- another beer, St. Louis 36 Vollmar, Budweiser: The tionwide only stood at tionwide. See United States Lager, as the brewery’s Early Years, 7. around four percent during Brewers Association, 1979 principle product. The re- the period immediately be- Brewers Almanac, as cited in placement was made in 37 Hernon and Ganey, Un- fore Prohibition, the rapid Stack, A Concise History of recognition of Budweiser’s der the Infl uence, 37. The growth of the fi rm (and » America’s Brewing Industry.

HOLIAN | ADOLPHUS BUSCH 199 39 Herbst, Roussin, and Kious, Bolstered by Budweiser’s initial success, Busch focused his atten- St. Louis Brews, 37. Over the years, there have been many tion on marketing both it and the brewery to a wider audience. The interpretations of the “A and eff ort to establish a corporate identity had already been launched Eagle” logo, but according to a 1954 company account by a decade earlier, in 1872, when the company introduced the Eberhard Anheuser, chairman of Anheuser-Busch logo, an intertwined A and eagle.39 In the early the board and grandson of the original partner in the fi rm, the 1880s, Adolphus Busch put together a four-pronged strategy to “A” in the corporate emblem make Budweiser the most celebrated beer in the nation. First, Busch represents Anheuser and the eagle “symbolizes Adolphus planned to distribute traditional, saloon-based point-of-sale adver- Busch, whose vision knew no tisements on a massive scale. As part of this, he aimed to produce horizon!” The account holds that the insignia was used for fi rst-rate advertisements, and he succeeded in achieving a level of the fi rst time in 1872 and formally trademarked in 1877. quality — and cost — unheard of among most brewers. Second, It remains a cornerstone of Busch planned to hire and dispatch a large group of trained and Anheuser-Busch advertising to this day. See “In the Anheuser- motivated salesmen, each of whom would represent a specifi c ter- Busch Tradition: The ‘A and ritory under the supervision of regional managers and would work Eagle,’” Budcaster 3.3 (March 1954): 7, 22; “Protection of closely with local distributors. Third, in addition to the customary Our Trademarks,” Budcaster promotional posters and printed matter, Busch planned to outfi t his 8.8 (August-September 1959): 6; and “Trade Marks: Protec- salesmen with small but innovative giveaway items — most notably tors of Quality,” Budcaster 7.3 an Anheuser-Busch combination pocketknife/corkscrew with a (Fall 1970): 12-13. small peephole directing the viewer’s gaze to a likeness of Busch 40 Vollmar, Budweiser: The Early himself. The idea was to make the Budweiser name more memo- Years, 8. The familiarity of Anheuser-Busch and Bud- rable to those who encountered it. Fourth, he focused on mass- weiser nationally gave rise to saturation advertising in the media outlets of the day, including marketing eff orts by others who sought to take advan- magazines, newspapers, literary journals, playbills, and billboards tage of the established names. across the country.40 The ultimate purpose of these eff orts was to Perhaps the most prominent pre-Prohibition refer- ensure that there was virtually no important place in the United ence to the company came States where the Anheuser-Busch and Budweiser names were not in 1903, when Tin Pan Alley songwriters Harry von Tilzer on prominent display on a nearly constant basis.41 and Andrew B. Sterling composed “Under the Anheuser Bush,” a waltz that gained While Busch maintained cordial relations with other St. Louis brewers, popular acclaim and was ad- few of whom presented any serious threat to his business supremacy opted by the brewery for the 1904 World’s Fair in St. Louis in the area, his dealings with out-of-town brewers occasionally (https://www.youtube.com/ watch?v=BOxrFGXQrzY). Dur- » other works, can be found size and market ambi- directly to a 263,294 baring the duration of the fair, in “Under the Anheuser tion. From 1891 to 1893, rel growth in Pabst sales. the company distributed sheet Bush,” Budcaster 3.9 Pabst spent $403,408 It also provided one of music of the song along with (September 1954): 3-4. to promote its brews — the earliest direct cor- an invitation for visitors to a fi gure that “probably relations between mas- tour the brewery. In 1907, 41 A rough estimate of how was large even for a ten- sive national marketing another company-inspired much money Anheuser- million-dollar corpora- campaigns and increas- song, “Budweiser’s a Friend of Busch designated for ad- tion selling in one of the ing beer sales. For a de- Mine,” was penned by Vincent vertising on Budweiser most highly competitive tailed overview of Pabst’s Bryan and Seymour Furth, specifi cally, and to sus- markets” — including a advertising expendi- but it did not garner the same tain its growth strategy record $162,414.94 in tures and strategies, see level of public recognition generally, can perhaps be 1891. The fi gure, which Thomas Cochran, The (https://www.youtube.com/ gleaned from the adver- represented a twenty- Pabst Brewing Company: watch?v=UTpYe_dvDXU). Bi- tising expenditures of the eight percent increase The History of an Ameri- ographies of Tilzer and Ster- Pabst Brewing Company, over any preceding year, can Business (New York, ling, and references to their » a fi rm of comparable was credited with leading 1948), 129-46.

200 GHI BULLETIN SUPPLEMENT 12 (2016) The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

assumed a less congenial tone.42 In some cases, practicality governed their relations and helped keep the peace — as, for instance, during the 1880s, when Busch contacted Milwaukee beer magnate Frederick Pabst (1836-1904) on multiple occasions to suggest ﬁ xing beer prices within the saloon trade (a legal activity at the time) in an attempt to ensure healthy proﬁ ts and to prevent saloonkeepers from playing the brewers off against each other. But outside of major urban centers, particularly in Midwestern regions and in rural areas and smaller towns and cities with fewer breweries and less competition, the story was dif- ferent. For example, a less than amicable arrangement marked the end of one economic disagreement in New Orleans, where local breweries engaged in a price war to the detriment of Anheuser-Busch products there. When the local brewers eventually upped their prices, believing that the external competition had been tamed, Adolphus cut the price of his beers, and continued to do so until the locals capitulated and agreed to Busch’s demand that he alone would determine the price of beer in the city for the next two decades.43 On other occasions, Busch opted to forego negotiations and simply acquired breweries of strategic interest to him. Through his early rail shipping activity, Busch had already built up a strong presence in Texas in the 1880s, and by the end of the nineteenth century, he had managed to obtain an interest in the Lone Star Brewing Company of San Antonio44 and the Texas Brewing Company in Fort Worth. Then, in 1895, Busch purchased another San Antonio operation, the Alamo Brewery, with plans to close it in order to minimize Lone Star’s competition in the city and the southern part of the state.45

42 Contemporary sources of the E. Anheuser Co.’s not always able to secure a 44 The Lone Star Brewery corroborate the idea that Brewing Association: in desirable outcome. In Operation that was partly St. Louis’ German- 1877, it registered the early 1895, Anheuser- owned by Adolphus Busch American brewers enjoyed production of 61,299 Busch, the Joseph Schlitz should not be confused cordial relations, seeing barrels of beer, compared Brewing Company of Mil- with the Lone Star Brewing each other as friendly com- to the 44,961 barrels waukee, and the United Company that operated petitors both personally logged by Anheuser- Breweries of Davenport, in the same city aft er the and professionally — a Busch, which claimed made an attempt to ma- repeal of Prohibition. The situation that resulted, in second place in the city. nipulate the market in latter fi rm opened under no small measure, from See Herbst, Roussin, and Davenport, Iowa. Schlitz independent ownership in their shared ethnic and Kious, St. Louis Brews, proposed raising the price 1940 and produced several immigrant bonds. At the 12, for a list of the largest per barrel from $6.00 to diff erent brews, including same time, however, these operating breweries in St. $7.00 if Anheuser-Busch its fl agship Lone Star Beer, sources also indicate that Louis for 1877, as culled and United Breweries fol- under diff erent corporate local rival fi rms were of- from the trade publica- lowed suit. When they owners until it closed in ten unable to compete tion The Western Brewer. failed to reach a consen- 1996, shortly aft er be- with the steadily increas- sus, a price war broke ing acquired by the Stroh ing sales fi gures posted 43 Hernon and Ganey, Under out that quickly lowered Brewing Company. by Anheuser-Busch. the Infl uence, 40-41. While the cost per barrel to only Among St. Louis brew- Adolphus had considerable $4.00. See “Notes From 45 Hernon and Ganey, Under ers, only the Lemp West- success in infl uencing beer Home and Abroad,” Ame- the Infl uence, 40-41; Julia ern Brewery was able to prices in conjunction with rican Brewer 28.3 (March Brookins, “William Acha- match the early growth his competitors, he was 1895): 124. tius Menger,” in IE.

HOLIAN | ADOLPHUS BUSCH 201 Vertical integration was essential to Anheuser-Busch’s ability to maximize profi ts and streamline its production process, and company possession of many of its own subsidiary operations translated into considerable cost savings for the brewery over time. Aft er launching the fi rst fl eet of refrigerated rail cars in 1876, Busch founded the St. Louis-based Refrigerator Car Company a few years later. The company manufactured units for its parent fi rm as well as other brewers and interested businesses. In 1887, Adolphus established the Manufacturers Railway Company to address the need to switch brewery boxcars from spur tracks to the main rail 46 Krebs and Orthwein, Making Friends Is Our Business, 33; lines used for export shipments. Over time, Busch also established Herbst, Roussin, and Kious, an on-site malt house to process the grain needed for brewing, cre- St. Louis Brews, 37. ated the Adolphus Busch Glass Manufacturing Company to make 47 While on the national level the bottles that he needed to ship to distant markets, and launched rival producers such as Pabst and Schlitz exhibited compa- a similar fi rm to make the wooden barrels required for unpasteur- rable growth during the pe- ized draft beer.46 riod, it was not uncommon for large brewers to actually lose market share –as did Well before the end of the nineteenth century, Adolphus Busch’s Anheuser-Busch, during the expansive sales strategies, innovative promotional eff orts, and sys- period 1895 to 1915 — due to the increasing number of tematic expansion of the Anheuser-Busch network of businesses breweries nationwide; their helped his brewery achieve a level of growth largely unmatched by rapid technological advance- 47 ment and growing effi ciency his rivals. Over a six-year period beginning in 1875, production and and higher barrelage as a re- distribution rose over sixfold: from 31,545 barrels per year in 1875 to sult of such progress; and periods of economic stagnation, 44,961 in 1877; then to 105,234 barrels in 1879; and fi nally to over such as during the 1890s, when a pronounced recession 200,000 barrels in 1881. Another six years of growth took the com- drove down production fi gures pany to 456,511 barrels in 1887, making it the largest beer producer in St. Louis, Cincinnati, and other cities with a large num- in the world at the time. Production only continued rising, reaching ber of competing breweries. 702,075 barrels in 1890.48 A quarter-century aft er purchasing an Above and beyond the market share loss demonstrated by interest in the struggling Bavarian Brewery, Busch had managed to Anheuser-Busch, from 1889 transform a small, locally-oriented operation into a multifaceted cor- to 1894, the barrelage of St. Louis Breweries, Ltd., a syndi- poration with name and brand recognition across the United States cate of British-owned brewers and in dozens of other countries. in the city, fell from 775,936 to 694,623 in total, and 11.4 percent from 1893 to 1894 specifi cally. See “The Syndi- cate Breweries of America,” The American Brewer 28.2 48 Production fi gures for the (Santa Barbara, 2003), in 1887, by the end of (February 1895): 60. For a period are cited in Herbst, 44; and “75 Years Ago . . . 1891 the Pabst Brewing more extensive discussion of Roussin, and Kious, In Spirit the Same To- Company had assumed the factors infl uencing beer St. Louis Brews, 36; Krebs day,” Brewers Digest (Sep- the crown, with a pro- production and market share, and Orthwein, Making tember 1952): 71. The duction level of 790,290 particularly during the 1890s, Friends Is Our Business, title of largest brewer in barrels. See “Pabst Brew- see Timothy J. Holian, Over 22; Jack S. Blocker, Jr., the world shift ed several ing Co., the Largest Beer the Barrel: The Brewing History David M. Fahey, and Ian times during the 1880s Brewery in the World,” and Beer Culture of Cincinnati, R. Tyrell, Alcohol and and 1890s. For instance, (advertisement), in Frank Volume One, 1800-Prohibition Temperance in Modern His- whereas Anheuser-Busch Leslie’s Illustrated Weekly, (St. Joseph, 2000), 207-12. tory: A Global Encyclopedia held the leading position May 19, 1892, 276.

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Social Status and Philanthropy During the 1880s, the level of prosperity attained by Busch increasingly inﬂ uenced his private life: eager to impress upon others his status as a German immigrant who had realized the American Dream, he spent large sums of money as a matter of custom. To arrive at his domestic destinations, he commissioned the Adolphus, a special rail car that was lavishly paneled, carpeted, and decorated with little regard for cost. Invariably, Busch wore the ﬁ nest European craft ed and tailored clothing; for his wife he purchased jewelry the likes of which few women in St. Louis high society possessed.

The Busch residences further demonstrated the many rewards of success reaped by Adolphus. While in St. Louis, the Busches made use of no fewer than three homes. Number One Busch Place, the former Anheuser family property, was the show- place of the group. As the primary estate, the Figure 4: Three-quarter- brick-and-stone mansion stood out to casual passers-by and was length portrait of Adolphus decorated lavishly to maximize the impression of grandeur it made Busch, 1890s. Courtesy of the Anheuser-Busch on visitors. The interior featured huge crystal chandeliers, parquet Archives. ﬂ oors and stained glass windows, a treasure trove of antiques, and works of art from a wide range of American, German, and French artists. Number Two and Number Three Busch Place were built for the Busch children as they grew older and had families of their own, the former becoming the primary residence of August A. Busch as the most direct heir to Adolphus and the leadership of the brewery.49

49 Hernon and Ganey, Un- collection included works Truebner, and Schramm- der the Inﬂ uence, 45. by American artists Zittau), and French artists Number One Busch (Browne, Bellows, Chase, (Boudin, Blanche, Degas, Place was torn down in Hitchcock, Lawson, Met- Harpignies, La Touche, 1929, one year aft er the calf, Schoﬁ eld, Sargent, Manet, Monet, Menard, death of Lilly Busch, and Winslow Homer, and and Renoir). See Krebs is now the site of a lager- McNeill Whistler), Ger- and Orthwein, Making ing cellar in the service man artists (Habermann, Friends Is Our Business, of the brewery. Adolphus Hofmann, Kampf, Liebl, 55, for a more exten- Busch’s private art Lenbach, Menzel, Schuch, sive list.

HOLIAN | ADOLPHUS BUSCH 203 Aft er years of enduring the cold winters and harsh summers of St. Louis, Busch took ownership of estates in Pasadena, California; Cooperstown, New York; and Bad Schwalbach, Hesse-Nassau, Germany, where he constructed an expansive residence named Villa Lilly, aft er his wife. Combined with a rustic lodge, the Waldfrieden, and expansive hunting grounds, the Villa Lilly added 1,200 acres of land to the Busch empire. From 1886 onward Adolphus made a habit of spending most of the winter with his family in Pasadena, where he had acquired the mansion of tobacco magnate George S. Myers (1832-1910) and renamed it Ivy Hall. He also had another home there, the Blossoms, which was reserved for visiting friends and otherwise for family members. The Blossoms alone cost $165,000 (approximately $3.95 million in 2010); from 1892 to 1897 Busch spent a half-million dollars (approximately $13.6 million) to transform the property through the addition of a series of gardens that eventually spanned thirty-ﬁ ve acres and included a variety of botanical treasures, fountains, and terraces whose maintenance required ﬁ ft y employees.50

With his personal wealth assured through the brewery’s longtime prosperity, Busch increasingly sought to engage in charitable activity, embracing an ethic of giving back to the community that had given him the opportunity to earn his fortune.51 Frequently, Adol- phus gave $1,000 to $5,000 gift s (2010 value: $23,676 to $118,382) to orphanages, hospitals, and relief societies, in St. Louis and elsewhere, including an annual $5,000 contribution to the House of the Good Shepherd every Groundhog Day. Busch regularly donated 50 Hernon and Ganey, Under the Infl uence, 46-47. money to German-American causes, both in honor of his immigrant heritage and as a show of solidarity with the community and its core 51 In addition to charitable $ giving within the German- values. In 1910, Busch donated 5,000 toward the construction of a American community, Busch monument to Franz Daniel Pastorius, the founder of Germantown, occasionally sent money back to Germany to recognize his Pennsylvania, the fi rst permanent German settlement in America. heritage and pay homage to The gesture stood out among the lagging donations by other mag- his roots. In one such case, Busch donated 50,000 nates, prompting one journal at the time to ask, “Is there really German marks (approxi- only a single Adolphus Busch among the thousands of wealthy mately $12,500; 2010 value: $296,000) to the city of Mainz German-Americans?” [“Gibt es denn wirklich nur einen einzigen for unspecifi ed distribution Adolphus Busch unter den Tausenden von wohlhabenden Deutschame- to needy individuals and/or 52 organizations. See “Personal rikanern?“]. In late 1911, Adolphus gave $5,000 (approximately Notes,” American Brewer 43.2 $118,000 in 2010) to the German-American Teacher’s College in (February 1910): 81. Milwaukee, describing the gift in a letter as a demonstration of his 52 “Umschau,” Monatsheft e für desire for greater awareness of what “the German element” had deutsche Sprache und Pädago- gik 11.6 (June 1910): 185. contributed to American culture:

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Whilst congratulating you on this endeavor, allow me to say that I hold it to be a sheer obligation of honor for the German element in the United States to support you in this eff ort and to open both heart and soul for the continuance and improvement of that wonderful educational institution. . . . I’ve always been convinced that the Milwaukee Teacher’s Semi- nar is a true spiritual arsenal for such battles and is therefore, alongside the great German-American Alliance, one of the most distinguished means of preservation of the German element and German cultural values in America.53

In extraordinary cases, Busch went well above and beyond anticipated levels of giving. When a major earthquake devastated San Francisco in 1906, he pledged $100,000 ($2.5 million in 2010) — $50,000 personally and another $50,000 on behalf of the brewery — to help victims, a precedent that the company followed for decades to come through monetary contributions and the distribution of supplies, most notably thousands of cases of brewery-packaged drinking water, to places aff ected by similar crises.54 Institutions of learning also benefi tted from Busch’s generosity, most prominently Washington University in St. Louis, whose medical school was started with $850,000 (2010 55 Hernon and Ganey, Under value: $20.1 million) given in the name of Robert A. Barnes, the bank the Infl uence, 70-71. president who had provided the loan needed for Adolphus to expand 56 Edward H. Keiser, “The 55 the brewery back in the 1860s. At the turn of the twentieth century, Busch Chemical Library,” Busch gave an additional $100,000 (2010 value: $2.68 million) to the Science 13.320 (February 15, 1901): 261. The Busch university for the construction of the Busch Chemical Laboratory, a relationship with Wash- Tudor Gothic edifi ce made of Missouri granite and Bedford limestone ington University continued well into the future, that one contemporary observer described as “an enduring monu- as demonstrated by the ment to the liberality of Mr. Busch.”56 Adolphus also partook in the sizeable gift given by An- heuser-Busch toward the kind of civic involvement that was common among wealthy German- construction of the Adol- phus Busch III Laboratory American entrepreneurs of the period. Aft er St. Louis received the of Biology. Dedicated on May 4, 1959, the facility served a new fi eld of study 53 “Umschau,” Monatsheft e Louis, with open arms those who aided the clean- at the school — molecular für deutsche Sprache und and an open till.” See up eff ort. The water was biology — and incorpo- Pädagogik 13.1 (January “Umschau,” Monatsheft e processed and packaged at rated up-to-date scientifi c 1912): 24-25. Busch’s für deutsche Sprache und the Regal Brewery in equipment such that it be- donation served to inspire Pädagogik 13.2 (February Miami, which was owned came “an important meet- other German-Americans 1912): 60. and operated by Anheuser- ing ground where modern to support the Milwaukee Busch at the time. See advances in chemistry project, including the City 54 One such Anheuser- “Regal Brewery Aids Hur- and physics are focused Federation of German So- Busch initiative occurred ricane Donna Victims in on the problem of fi nd- cieties of Evansville, Illi- in 1960, when the com- Florida Keys,” Budcaster ing out how living things nois, which proposed and pany donated 6,000 quarts 9.10 (November 1960): 3; work.” See Barry Com- passed a measure to take of pasteurized Miami city and “Regal Brewery’s ‘Op- moner, “Adolphus Busch up a collection for it “ac- drinking water to victims eration Water’ Wins P.R. III Laboratory Is Dedi- cording to the example of Hurricane Donna, in the Award,” Budcaster 10.5 cated,” Budcaster 8.6 (June of Adolphus Busch in St. Florida Keys, as well as for (May 1961): 5. 1959): 4-5.

HOLIAN | ADOLPHUS BUSCH 205 distinction of hosting the 1904 Louisiana Purchase Exhibition, he was off ered, and accepted, the position of director of the World’s Fair, a role he fulﬁ lled until his resignation in November 1904.57 In 1913, Busch served as the honorary president of the seventh convention of the National German-American Alliance, held in St. Louis that year, and oversaw its centenary celebration of the Battle of Leipzig (also known as the Battle of the Nations), which had led to the defeat of Napoleon and his eventual abdication and exile.58

True to German-American tradition, Busch was an active supporter of ﬁ ne arts institutions. Local engagement included help in “most generously” underwriting a summer loan exhibition of paintings by both American and foreign masters at the St. Louis City Art Museum in 1911. On a national level, Busch donated money as well as works of art, such as Heinrich Zügel’s painting Oxen Going through the Water, to the Metropolitan Museum of Art in New York. By the spring of 1909, the painting had become one of the most popular pieces in the museum’s permanent exhibition of contemporary art.59 In 1911 and 1912, he donated $350,000 (2010 value: $8.12 million) to help fund the

57 Herbst, Roussin, and Kious, construction and maintenance of the Germanic Museum on the cam- St. Louis Brews, 39. pus of Harvard University. He made the gift in the hopes of creating 58 “Umschau,” Monatsheft e für a museum that would spur the establishment of comparable institu- deutsche Sprache und Pädago- tions at universities in other cities.60 Today, the museum houses an gik 14.4 (April 1913): 143. extraordinary collection of art from German-speaking Europe, and 59 “Principal Accessions,” Me- tropolitan Museum of Art Bul- is known as the Busch-Reisinger Museum. letin 4.4 (April 1909): 69. In one particular case, Busch’s private love for the visual arts spilled 60 “Personal Notes,” The Ame- rican Brewer 43.1 (January over into his professional life, where it ultimately reached and in- 1910): 29, and 43.6 (June ﬂ uenced countless millions of beer consumers. In the early 1890s, 1910): 297-98; “Art in St. $ $ Louis,” Art and Progress 2.12 Busch spent 35,000 (approximately 875,240 in 2010) to acquire (October 1911): 373; Charles a painting that he greatly admired, Custer’s Last Fight by Cassilly H. Herty, “University and Educational News,” Science Adams. At the time, the painting hung on the wall of a St. Louis 33.839 (January 27, 1911): saloon. The American-Indian motif resonated with Adolphus, as it 146. In a message Busch delivered at the cornerstone did with many German immigrants, some of whom had developed a ceremony, he reiterated his fascination with Native Americans, the Wild West, and frontier life hope that such eff orts would 61 prompt greater cooperation back in their homeland. Busch was so moved by the painting that and understanding between Germany and the United » such intimate relations 13.7 (September 1912): to the United States, States: “We have every reason between America and 243-44. promotional brochures to promote a venture that Germany can be created. that played up the unique demonstrates our love for Long live the good 61 This fascination had aspects of American our adoptive Fatherland harmony between been nurtured by a vari- frontier life, and the and the love which still Germany and the United ety of sources, including literary works of promi- beats within our hearts States!” See “Umschau,” letters from friends and nent German writers for the land of our birth. . . . Monatsheft e für deutsche family members who such as Karl May In conclusion I hope that » Sprache und Pädagogik had already immigrated (1842-1912).

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he commissioned a local artist to recreate the work with additional details and then arranged for the new version to be lithographed for widespread distribution. It proved to be the most successful promotion launched by Anheuser-Busch in its pre-Prohibition marketing eff orts.62 In 1896 — the same year that Anheuser-Busch introduced the enduring Michelob brand63 — it placed thousands of copies of the Custer image in strategic retail accounts; in subsequent decades, the brewery printed over a million copies of the image, making it one of » Adams work “redrew most of it, adding dozens of the most widespread art images ever used for commercial purposes new fi gures and buckets and what Time magazine later called “at the turn of the century, the of gore (i.e., three dying 64 soldiers being scalped) to most famous painting in the U.S.” what was once a fairly restrained, stilted scene.” In subsequent years, the Final Years original Adams painting met with an unpleasant At the dawn of the twentieth century, Adolphus Busch could look fate. Donated by Busch to the 7th U.S. Cavalry back on a legacy of accomplishment rivaled by few German-American during the mid-1890s, entrepreneurs, and even fewer members of the industry in which he it went lost from around 1898 — when the group had become an unquestioned pioneer and leader. In 1901, produc- was dispatched to the tion at the St. Louis brewery surpassed the one million barrels-per- Spanish-American War — until 1921, and was not year mark, and Anheuser-Busch overtook Schlitz as the largest beer recovered by the regiment producer in volume in the United States.65 Not content to rest upon until 1934, when it was removed from storage and his laurels, and eager to keep pace with rapidly increasing demand, professionally restored by Busch authorized a $1.2 million (approximately $30.7 million in the Works Progress Ad- ministration. On June 14, 2010) expansion of the facility in 1905 through the construction of a 1946, it was destroyed seven-story stock house. In 1906, Anheuser-Busch reached the 1.5 in a fi re at the offi cers’ club at Fort Bliss, Texas. million barrel production mark, and in 1907, with an insured value See Peter Caswell, “The $ $ Bar Room Custer,” of 6 million (approximately 143.6 million in 2010), the improved Military Aff airs 11.1 brewery complex was capable of producing at least 1.6 million barrels (Spring 1947): 51. of beer per year, of which 560,000 barrels alone — some 173 million 65 “75 Years Ago . . . In Spirit bottles — were bottled Budweiser for external markets.66 the Same Today,” Brewers Digest (September 1952): 63; Blocker, Jr., Fahey, and Tyrell, Alcohol and 62 The advertising icon 63 From the beginning, on the Michelob brand Temperance in Modern most commonly associ- Michelob was produced can be found in “The History, 44; Uwe ated with Anheuser- as a superior-quality, History of Michelob,” Spiekermann, “Family Busch — the Budweiser European-style lager Budcaster 9.7 (July 1960): Ties in Beer Business: Clydesdale horse-and- beer served on draft at 5; and “Michelob Now August Krug, Joseph wagon team — in fact selected retail accounts, Available in Bottles,” Schlitz and the Uihleins,” was not introduced until although starting in late Budcaster 11.1 (January Yearbook of German- 1933, with the repeal of 1961 it also was pack- 1962): 13. American Studies 48 Prohibition. For an aged in bottles, and later (2013 [2015]): 59-112. overview of the early his- still in cans, to make it 64 Herbst, Roussin, and tory of the Clydesdales more accessible to the Kious, St. Louis Brews, 38; 66 Hernon and Ganey, Un- and Anheuser-Busch, general public. The name “The Baron of Beer,” Time der the Infl uence, 56, 64- see “Budweiser’s Famous of the product was 66.2 (July 11, 1955): 82. 65; “75 Years Ago . . . In ‘Eight-Horse Hitch’,” chosen by Adolphus According to Time, the Spirit the Same Today,” Brewers Digest 27.5 (May Busch personally. lithographer who altered Brewers Digest (September 1952): 40-41. Additional information and reproduced the » 1952): 64.

HOLIAN | ADOLPHUS BUSCH 207 As the nineteenth century had drawn to a close, Busch had turned his attention to the threat of prohibition legislation, which was gradually making inroads across the nation at the local and state levels and was threatening established brewery markets.67 As early as 1908, the brewery marketed Bevo, a non-alcoholic brew designed to maintain an Anheuser-Busch presence in dry zones and hedge bets against the possible suspension of standard beer sales nationwide. In 1910, Busch made clear his personal belief that the dry movement was a misguided venture that was out of keeping with the German virtues long demonstrated by both brewers and their product:

The meanest thing in the world is prohibition. If given full 67 While the threat of Prohibi- tion was the foremost concern swing it would ruin the world. It is a maker of hypocrisy and of Adolphus Busch in his last a destroyer of moderation. We want moderation in every- years of running Anheuser- Busch, other problems arose thing. In Germany every one drinks, but it is done in mod- as well: for instance, on April eration, and Germans are a remarkably healthy race. We 27, 1910, an extensive fi re broke out at the St. Louis want the high license and the regulation of the saloon. I do brewery, devastating bot- not mean to say that all those who preach prohibition are tling and storage buildings 68 on the property and caus- hypocrites. They mean well, but are on the wrong track. ing over $500,000 (approximately $11.8 million in 2010) in damage. See “American Transition at the company was not limited to its product line. Son Notes,” American Brewer 43.5 August A. Busch, Sr., groomed as the eventual successor to the presidency, (May 1910): 242. The prohibition movement is best had begun working at the brewery in the 1880s as an apprentice and then understood in this context as as a scale clerk before rising to a position of leadership a decade later, a reactionary nativist movement against the German ele- assuming pro tempore command of the operation in place of his father ment and as an assertion of 69 “American” values at their during the out-of-town trips that Adolphus took with greater frequency. expense. The largely German ethnic character of the late- In the spring of 1911, Adolphus and Lilly hosted a lavish ceremony in nineteenth-century brewing industry made it an easy tar- California to celebrate their fi ft ieth wedding anniversary, an occasion get for such agitation; begin- deemed important enough to give brewery employees in St. Louis ning primarily in rural areas and spreading over time into a day off from work and each of the Busch children a new home. urban settings, anti-alcohol Congratulations came from around the world, with the well-wishers forces linked anti-foreign sentiment with both real (e.g., an including current U.S. president William Howard Taft , former U.S. increasingly immoral saloon president Theodore Roosevelt, and German emperor Wilhelm II.70 trade) and perceived vices in an attempt to gain traction for their agenda. Their eff orts 69 The fact that Adolphus decisions to his son and 70 Herbst, Roussin, and culminated in the ratifi cation Busch was in Europe others. On average, Kious, St. Louis Brews, of the Eighteenth Amend- for extended periods this communication 39; Krebs and Orthwein, ment, which occurred in the did not prevent him cost some $100 Making Friends Is Our wake of America’s entry into from conducting brew- per day (approximate Business, 67. A detailed World War I against the Ger- ery business as needed. 2010 value: $2,368). overview of the opulent mans in 1917. Busch kept in frequent See “75 Years Ago . . . nature of the Busch’s fi f- contact with St. Louis In Spirit the Same tieth anniversary celebra- 68 Cited in “Adolphus Busch on via cable while abroad, Today,” Brewers tion can be found in Prohibition,” American Brewer sending instructions Digest (September Hernon and Ganey, Under 43.7 (July 1910): 326. regarding important 1952): 63. the Infl uence, 78-79.

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It turned out to be one of the last high-proﬁ le events that Adolphus ever hosted, as the stress of prohibitionist gains seemingly exacer- bated a general health decline that had been brought on by advancing years. By 1910, Busch had begun to pursue a more reclusive lifestyle, and was said to be “surrounded by doctors, nurses and guardians and never permitted to be seen at close range.”71 Despite his fading strength, political activity still occupied a good bit of Busch’s time during his last years. This included a personal visit with Theodore Roosevelt and opposition during the electoral campaign of 1912 to the candidacy of Democrat Woodrow Wilson, a man he dismissed in private correspondence the following comment: “I have a kind of feeling that the fellow is a prohibitionist and that he is leaning that way and therefore all the German orators, all the liberal men ought to accuse him of [being] an enemy to personal freedom.”72

In May 1913, Busch returned to St. Louis, but owing to his fragile health and his inability to stand or walk without assistance, his homecoming was muted compared with his previous, more celebrated arrivals. Still, Adolphus remained sharp mentally and focused on both personal responsibilities to family and professional obligations at the brewery. On June 9, 1913, he departed New York and sailed with his family to Germany for the last time. There, he engaged in hunting, albeit with help from a trusted personal assistant, corresponded extensively with friends and family, and monitored the rising tide of prohibition legislation back at home, remaining in regular contact via letter and telegraph with trusted associates on business matters. In September of that year, Adolphus accepted an award for his charitable contributions to the German people from Phillip, Duke of Hesse. 71 Cited in Hernon and Otherwise, he began to curtail many of his activities (aside from stag Ganey, Under the Infl u- hunting) due to recurring feelings of illness. In early October, Busch ence, 80. was taken home from hunting aft er complaining of discomfort, and 72 Adolphus Busch to fl uid was removed from his lungs. On October 10, 1913, Adolphus Charles Nagel, personal correspondence, July 3, apparently attended to fi ft een letters on his desk at Villa Lilly, smoked 1912, Nagel Papers at the a cigar, and chatted freely and cheerfully with family members. By Yale University Library, as cited in Hernon and evening, Busch went to bed as usual. At approximately 8:15 p.m., Ganey, Under the Infl u- he died in his sleep of what was offi cially reported as heart disease, ence, 80. though a later biography concluded that cirrhosis of the liver con- 73 St. Louis Post-Dispatch, tributed to his death.73 October 11, 1913; Octo- ber 12, 1913; and October 22, 1913; Dictionary of In keeping with his grandiose lifestyle, the passing of Adolphus American Biography (New Busch occasioned one of the most extravagant funeral ceremonies York, 1943), 143, as cited in Hernon and Ganey, Un- of the century and demonstrated the totality of his impact on nearly der the Infl uence, 83-84.

HOLIAN | ADOLPHUS BUSCH 209 all whom he had touched over the previous half-century. Aft er being transported in a private rail car to port in Bremen, his body was brought back to the United States aboard his favorite steamship, the Kronprinz Wilhelm, and was then taken by a specially-chartered train — which included his private car, the Adolphus — to St. Louis for burial. One hundred hotel rooms were reserved for out-of-town guests, 180 honorary pallbearers were named, and mourners included the presidents of Harvard, the University of California, and the Uni- versity of Missouri, numerous business and industrial leaders, and at least one major rival for the title of owner of the largest brewery in the world: Colonel Gustav Pabst of Milwaukee (1866-1943). Five thousand Anheuser-Busch employees attended a fi nal viewing of their boss at the Busch mansion the day before the funeral, and when the home was opened to the public, some 30,000 additional individuals came to pay tribute. The city of St. Louis formally shut down for fi ve minutes in honor of Busch: all business was suspended, power to the street cars was turned off , and factories came to a halt. Throughout the nation, memorial services were held in cities with Anheuser-Busch branch offi ces, most notably in Dallas, Texas, where the Adolphus Hotel — bought by the beer baron and renovated in 1912 for the unprecedented sum of $2.5 million (approximately $58 million in 2010) — hosted 300 people and played the same music that had been heard at the service in St. Louis. The funeral itself, held at the Busch mansion, was presided over by notable fi gures such as Baron Friedherr von Lesner, the attaché of the German Embassy in Washington; at the end, the casket was placed upon a truck for a

74 Extensive details of the Busch fi nal trip around the brewery, where some 25,000 people stood out- funeral proceedings are avail- side its iron gates to glimpse the proceedings. The fi nal procession, able in Hernon and Ganey, Under the Infl uence, 85-86. to Bellefontaine Cemetery in St. Louis, followed a well-publicized route with as many as 100,000 spectators lining up to pay tribute.74 75 The Busch tendency to allo- cate large amounts of money to expand and modernize the St. Louis brewery also contin- Conclusion ued in the early post-Prohi- bition era. Some $68 million The legacy of Adolphus Busch continued to be felt for decades to (2010 value: approximately come, as Anheuser-Busch consolidated its status as the largest $824 million) was spent on new equipment and structures brewer in America, and as Budweiser grew to become the best-selling for the St. Louis plant from brand of beer in the world. August A. Busch, Sr., guided the fi rm 1933 to 1950, before a second Anheuser-Busch facility, through the diffi cult years of World War I and Prohibition until he in Newark, NJ, was put into committed suicide in February 1934 on account of extensive health operation in 1951 to ease production and shipping expense problems; grandson Adolphus Busch III (born 1891) successfully problems. See “The Brotherly navigated the choppy waters of the remainder of the Great Depression Brewers,” Fortune 41.4 (April 1950): 180, 182. and World War II before dying of cancer in August 1946.75 Another

210 GHI BULLETIN SUPPLEMENT 12 (2016) The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

grandson, August A. (Gussie) Busch, Jr. (1899-1989), saw the company through much of its golden era of growth, taking the fi rm from a single-site entity to one with nine separate breweries nationwide and aggregate beer sales of 26,522,000 barrels by 1973. In 1964, under his leadership, production at the St. Louis facility alone reached the ten million barrels-per-year mark. Aft er alternating with Pabst and Schlitz as the largest brewer in the nation in the fi rst two decades aft er the repeal of Prohibition, Anheuser-Busch seized the top spot for good in 1957, and remained the number one U.S. brewer until the present.76 In 1997, its worldwide sales volume surpassed the 100 million barrel mark for the fi rst time, and in 2003 the company peaked in U.S. market share at 49.8 percent; virtually one of every two beers sold in the United States was brewed by Anheuser-Busch. Ultimately, the sustained success of the business made it an attractive target for takeover, and in 2008 the multinational brewing conglomerate InBev acquired Anheuser-Busch with shareholder approval, based on an all- cash off er of $70.00 per share of stock that represented a total value of $52 billion.77 The move, which put an end to Busch family control of the business, came 143 years aft er Adolphus acquired his initial stake in a struggling St. Louis brewery and set it on a path to becoming the largest and most successful brewing entity in American history.

Timothy J. Holian is a Lecturer of German at the University of Wisconsin White- water. His professional interests include German-American Studies and the history of the brewing industry in the United States. He is the author of the two-volume book project Over the Barrel: The Brewing History and Beer Culture of Cincinnati, among other research-based works.

76 Herbst, Roussin, and Kious, St. Louis Brews, 41- 45; Anheuser-Busch, Inc., “1972 Beer Sales Set New Record,” A-B News 10.1 (January 1973): 1.

77 Herbst, Roussin, and Kious, St. Louis Brews, 49; “Anheuser-Busch — Van Nuys, CA — Breweries on Waymarking.com,” http:// www.waymarking.com/ waymarks/WM85MT_ Anheuser_Busch_Van_ Nuys_CA (accessed Febru- ary 12, 2012).

HOLIAN | ADOLPHUS BUSCH 211

The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

JACOB H. SCHIFF, BANKER AND PHILANTHROPIST

Bernice Heilbrunn

A banker and philanthropist, Jacob H. Schiff secured European funding to build America’s railroads, mines, and other enterprises. He helped transform the United States into the world’s leading in- dustrialized economy. At one time or another, Schiff marketed the bonds of every major U.S. railroad. Under his innovative leadership, the New York banking fi rm of Kuhn, Loeb & Company developed a worldwide reputation for successful fi nancing, sound judgment, and integrity. Schiff ’s strategic loans to Japan during the Russo-Japanese War facilitated Japan’s surprise victory. In the interest of American prosperity, Schiff advocated the German model of integrated industry, which he preferred over the American penchant for unbridled and often ruinous competition. Despite his political infl uence, his business advice to presidents and lawmakers failed to win favor at a time when muckrakers, politicians, and reformers demanded trust-busting. Pursuing charitable work from an early age, Schiff contributed his wealth and time to secular charities and Jewish communal needs, not only in America and Germany but also worldwide. Schiff became known as a leader of American Jews during his lifetime. His estate, valued at approximately $35 million in 1922 ($455 million in 2010 U.S. dollars),1 less than one-third the size of J. Pierpont Morgan’s estate, refl ected his lifelong charitable giving.2

Family and Ethnic Background 1 All current values (in 2010 Jacob H. Schiff (born Jakob Heinrich Schiff on January 10, 1847, died USD) are based on Samuel H. Williamson, “Seven September 25, 1920, in New York, NY) was the second son and third Ways to Compute the Rel- child of Moses (1810-1873) and Clara Niederhofh eim Schiff (1817- ative Value of a U.S. Dollar Amount, 1774 to present,” 1877) of Frankfurt am Main. Moses Schiff , a successful stockbroker, MeasuringWorth, 2011, was an active member of Frankfurt’s orthodox Jewish community. using the Consumer Price Index. With a Frankfurt lineage dating back to about 1370, the Schiff s were among the city’s oldest and most established Jewish families. Jacob 2 “J.H. Schiff ’s Estate Fixed aft er Decade,” New York Schiff ’s direct ancestors included many rabbis, scholars, scientists, Times, August 23, 1931, and merchants, some of whom were particularly notable: Meir ben 1; Jacob H. Schiff Left $34,426,282 Estate,” Jacob Schiff (1608-1644), who wrote a commentary on the Talmud, New York Times, March 3, and David Tevele Schiff (1722-1791), rabbi of London’s Great Synagogue 1922, 1. from 1765 until his death. Other Schiff relatives included two Chief 3 Cyrus Adler, Jacob Rabbis of London, Nathan Marcus Adler (1803-1890) and Hermann H. Schiff : His Life and Letters, vol. 1 (Garden City, Adler (1839-1911), who served in that position from 1845 to 1911.3 NY, 1928), 1-3.

HEILBRUNN | JACOB H. SCHIFF 213 Schiff grew up in Frankfurt, a bustling commercial and banking center and the seat of the German Confederation. Frankfurt was also the center of Jewish life in Germany.4 Frankfurt’s Jews, who consistently accounted for about ten percent of the city’s population, won political rights in 1864.5 Schiff received a balanced secular and religious education in the renowned Frankfurt Jewish school that his father, together with other communal leaders, established in 1853. The school educated students from religious homes to become businessmen and community leaders. Schiff ’s family life, his father’s active role in the community, and his school experience were key factors in the shaping of his youthful personality.6 At fourteen, he began his business training. First, he apprenticed at a leading mercantile warehouse enterprise in Frankfurt; then he worked for his brother- in-law in banking.7

Ambitious and hardworking, Schiff decided to immigrate to America. Unlike many immigrants, Schiff did not leave Germany to escape poverty or to marry. Nor was he pulled toward emigration by family in America. In fact, Schiff was the only member of his family to leave Germany. Apparently, he emigrated because his rigid, overbearing father was too strong a presence for a young man determined to control his own future. He was drawn to the U.S., a developing nation ripe for investment aft er the Civil War. While still in Germany, Schiff wrote an exploratory letter to a family friend in St. Louis, Missouri, in the hopes of securing a position. When that failed to yield results, Schiff , undaunted, sailed to New York alone and without any off er of employment. He arrived in August 1865.8

Schiff became a naturalized U.S. citizen in 1870, a fact that indi-

4 Nachum Gidal, Jews in cates his intention to remain in America. Yet becoming an Ameri- Germany from Roman can citizen did not mean severing ties with Europe. Schiff always Times to the Weimar Re- public (Cologne, 1998), maintained strong business and family connections with Germany. 90, 148. When the Hamburg-based banker Moritz Warburg off ered Schiff a

5 Robert Liberles, Religious position with his fi rm, M. Warburg, which represented the London & Confl ict in Social Context: Hanseatic Bank of London, Schiff moved to Hamburg in 1873. Just The Resurgence of Orthodox Judaism in Frankfurt am two years earlier, in 1871, the disparate German states that had once Main, 1838-1877 made up the German Confederation had been united under Emperor (Westport, 1985), 162. William I into a single German nation state. It is conceivable that 6 Ibid., 152-55. the promise of economic growth presented by the newly unifi ed 7 Adler, Jacob H. Schiff , vol. Germany helped pull Schiff back to his native land; alternatively, 1, 7. the depression of 1873 in America may have pushed him to leave 8 Ibid., 4-6. New York.

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Schiff only worked for M. Warburg for a few months. His father died later that year, and he returned to Frankfurt to attend to his mother. About a year later, the German-born American banker Abraham Kuhn (1838-1900) visited Frankfurt and off ered Schiff a position at his New York investment banking ﬁ rm, Kuhn, Loeb & Company. Though reluctant to leave his widowed mother, Schiff returned to New York City with her blessing. He brought strengthened ties to European banking to his new position in America.9

As a single young man, Schiff lived and worked among German immigrants in New York City. The social milieu of German immigrant youth must have provided Schiff with a supportive environment, particularly since he was quickly incorporated into New York’s German-Jewish community. Nevertheless, the serious young Schiff lamented the absence of social institutions and organized activities for young people, and he sought alternatives to sports and drinking. When he could aff ord to do so, Schiff helped establish the 92nd Street Y in New York City to provide others with some of the cultural opportunities that he missed.10

Business Development Frankfurt Jewish connections proved invaluable to the young Schiff when he started out in investment banking in New York City, particularly since gentiles would not do business with him. When the eighteen-year-old Schiff ﬁ rst arrived at the docks in 1865, he was met by William B. Bonn (1843-1910), a fellow Frankfurter who was a few years his senior. Bonn, who was with the Frankfurt-based investment-banking ﬁ rm of Speyer & Company, provided Schiff with crucial early support; later, Speyer & Company worked with Schiff on many investment opportunities.11

In addition to Bonn, Schiff reached out to other New Yorkers who had emigrated from Frankfurt and elsewhere in Germany. Within months of his arrival, Schiff secured a position as a clerk with the brokerage ﬁ rm Frank & Gans. One year later, days before his twentieth birthday, Schiff entered into a partnership with Heinrich “Henry” Budge (1840- 1928) and Leo Lehmann, both from Frankfurt, and together, they 9 Ibid., 8. founded the New York brokerage ﬁ rm of Budge, Schiff & Company. 10 Naomi Cohen, Jacob H. The importance of ethnic ties can be seen in the fact that it was Schiff : A Study in American Jewish Leadership William Bonn who had urged Lehmann, then in Europe, to return (Hanover, NH, 1999), 4-5. to New York to form a partnership with Schiff . For young Germans, 11 Adler, Jacob H. Schiff , vol. American investment banking was sometimes a short-term venture 1, 6-7.

HEILBRUNN | JACOB H. SCHIFF 215 of making connections. That was the case with Budge. A few years aft er entering into the partnership, Budge left America, moved to Ham- burg, and became a member of another banking ﬁ rm in that city.12

Schiff built his reputation and fortune at the commercial banking ﬁ rm of Kuhn, Loeb & Company in New York City. Kuhn, who emigrated from Germany in 1839, and Solomon Loeb (1828-1903), who came to America ten years later, were both from Worms in the grand duchy of Hesse. Upon their arrival, they both became dry good merchants in Cincinnati. Aft er amassing $500,000, they relocated to New York City, eventually starting what in 1867 became the investment-banking ﬁ rm of Kuhn, Loeb & Company. Kuhn and Loeb relied on their European contacts, especially Germans, to place U.S. government and railroad bonds. Aft er Kuhn brought Schiff into the partnership in 1875, Schiff aggressively expanded Kuhn, Loeb & Company’s business.13

Among U.S. growth industries, railroads were the undisputed leader. From the late 1860s until the 1890s, the demand that they created for steel, coal, rolling stock, civil engineering, and labor drove the U.S. economic engine. Their capitalization dwarfed the largest manufacturers, and their inﬂ uence was felt in all aspects of American society.14

Schiff made good use of his European banking connections, successfully allying with European bankers to attract European capital to ﬁ nance American railroads. European investors sought out American investments, which promised higher rates of return than European ventures. In turn, American business, particularly railroads, depended on European capital to ﬁ nance expansion, improvements, and operating expenses. Schiff brought to the banking business an existing base of contacts garnered from his Frankfurt network, his previous work in New York, and his experience at M. Warburg in Hamburg. He cultivated and extended this base assiduously through frequent European travel, regular correspondence, personal outreach, and private hospitality. By way of example, about 1,500 letters from Schiff to German-born British banker Ernest Cassel (1852-1921) attest 12 Cohen, Jacob H. Schiff , 4; to Schiff ’s attentive mingling of business and personal camaraderie Adler, Jacob H. Schiff , vol. 1, 7. as he kept important clients informed of the status of their invest- 13 Adler, Jacob H. Schiff , vol. 1, ments. Cassel, who valued Schiff ’s advice, recommended him to his 11-12. colleague, the young Paris banker Édouard Noetzlin (1848-1935). 14 Thomas McCraw, Prophets When Noetzlin traveled to New York, he met with Schiff , who advised of Regulation: Charles Frances Adams, Louis D. him to go to Mexico to explore possible investments. As a result of Brandeis, James M. Landis, his Mexican trip, Noetzlin set up the National Bank there in 1881. His Alfred E. Kahn (Cambridge, MA, 1984), 4. friendship with Schiff opened a door to their eventual cooperation in

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large joint transactions, especially their marketing of Pennsylvania Railroad bonds in 1906. Another one of Schiff ’s close European contacts was Robert Fleming (1845-1933), ﬁ rst of Scotland, later of London. Fleming visited the U.S. eighty-two times, and Schiff met with Fleming during his European trips; together with regular correspondence, their visits provided the basis for a lifetime of banking transactions on behalf of clients.15

Schiff did not limit his business to Europeans. Developing links with Japanese investors, Schiff corresponded with and visited Baron Korekiyo Takahashi (1854-1936). He and his wife, Therese Loeb Schiff , even hosted the Baron’s teenage daughter for three years, the start of a lifelong friendship between the Schiff s and the extended Takahashi families.16

For the most part, Schiff ’s European and Japanese contacts served in lieu of the foreign branch offi ces, staff ed with family members, maintained by the New York-based Morgan bank and by many Eu- 15 Ibid., 12. ropean banks as well. Schiff generally emphasized alliances instead 16 Ibid., 13. of branch offi ces, which he organized with independent fi rms in London, Paris, and Amsterdam. In some instances, however, Schiff 17 Jacob Schiff to Ernest Cassel, January 20, 1891; did choose to rely on family contacts. In Hamburg, for example, his Jacob Schiff to Paul former employer, M. Warburg, eventually became family, and the Warburg, December 23, 1895, Jacob Schiff Papers, two fi rms increasingly worked together to secure German investment American Jewish Archives, capital.17 Aft er his nephew Otto Schiff (1875-1952) left Germany and Cincinnati, Ohio. settled in London, he occasionally worked on behalf of Kuhn, Loeb 18 The Jacob Schiff Papers with English investors interested in American opportunities..18 document his frequent correspondence with Robert Fleming, fi rst in Making his home in New York City, Schiff settled into America’s Scotland and then in London, Ernest Cassel in fi nancial capital. Earlier in the nineteenth century, the Erie Canal London, Max Warburg project, which connected New York to the Great Lakes, helped trans- in Hamburg, the Barings House in London, Ed- form New York City into America’s center of fi nance and trade. At the ouard Noetzlin in Paris, time, westward expansion, industrialization, and mining promised Baron Korekiyo Takahashi in Japan, and others in revenues for railroads. With the end of the Civil War, pent up demand Amsterdam and else- exploded in a frenzy of business activity.19 where.

19 Daniel Howe, What Hath Schiff was the only immigrant banker who undertook railroad ﬁ nanc- God Wrought: The Trans- ings; the others left the business to Yankee bankers. When Schiff formation of America, 1815-1848 (New York, joined Kuhn, Loeb, he recognized the signiﬁ cance of railroads to his 2007), 117-20; George work. Writing to his mother on January 1, 1875, Schiff noted that Tindal and David Shi, America: A Narrative His- “the opportunity is enormous here . . . The coming expansion of the tory, 6th ed. (New York, United States, in railroading and all that, is so large.”20 Schiff tapped 2004), 760-62. into this new market with a decisiveness and willingness to assume 20 Cohen, Jacob H. Schiff , 5.

HEILBRUNN | JACOB H. SCHIFF 217 risk that most established American fi rms avoided. He quickly assumed a leadership role within Kuhn, Loeb. When Solomon Loeb retired in 1885, Schiff , then thirty-eight, became head of the fi rm. As a mark of his humility and devotion to his wife’s family, Schiff never changed the fi rm’s name to include his own, though he was indisputably the fi rm’s leader during his lifetime.21

Until 1904, railroad investments exceeded the sum of all other forms of commercial investments in the United States.22 Railroads needed large amounts of money to lay track and buy equipment. Issuing bonds was one way for them to meet their fi nancial needs. Europe- ans who wanted high yields on their investments chose emerging economies, looking to the United States as it rapidly developed. Transcontinental railroads promised to bridge the Atlantic and Pacifi c but involved enormous risk, since the western territories were thinly populated and it was unclear whether trade and ridership would be suffi cient to make the railroads profi table. Southern railroads, un- derdeveloped from the start and largely destroyed during the Civil War, were being rebuilt and expanded, but there were uncertainties there, too. Railroads everywhere engaged in cutthroat competition. Their managers were not always fi scally judicious. To obtain capital in a timely manner, railroads relied on underwriters to assume the risk of the market for their debt. If bankers could not fi nd subscribers for a debt issue, they had to purchase the securities themselves and assume the risk involved with their future placement.

Under Schiff ’s direction, Kuhn, Loeb juggled these market uncertainties. Sometimes the fi rm readily placed debt issues; other times, it had to buy them and place them later, when opportunity permitted, sometimes at reduced prices that required Kuhn, Loeb to assume the loss. In some instances, Kuhn, Loeb acted on its own to place debt in- 21 Cohen, Jacob H. Schiff , 5; McCraw, Prophets of Regula- struments; in other instances, the fi rm joined other banks in syndicates tion, 4-5. to off er the debt issuance, sharing the profi ts as well as the risks. Such

22 Steven Usselman, Regulat- activities demanded that the fi rm maintain adequate cash liquidity to ing Railroad Innovation: Busi- meet its clients’ needs. When Schiff entered the fi eld, syndicates were a ness, Technology, and Politics in America, 1840-1920 (New relatively new way to market debt instruments. It may be that German York, 2002), 243. syndicates predated American ones, for Schiff placed Northern Pacifi c 23 23 Adler, Jacob H. Schiff , vol. 1, Railway securities with a syndicate of German investors in 1870. The 83. fi rst underwriting syndicate in the U.S. was founded in 1871.24

24 Frederick A. Cleveland and Fred Wilbur Powell, Railroad Schiff expanded Kuhn, Loeb’s underwriting beyond railroads to pro- Promotion and Capitaliza- vide capital for mining and industrial manufacturing. The success of tion in the United States (New York, 1909; 1981), 287. these enterprises was closely linked: the railroads oft en created the

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market for their product and in other instances beneﬁ tted from their transport. Westinghouse Company, for example, appeared promising to Schiff in 1898 because it manufactured air brakes for railroads. Mining, on the other hand, promised to be a source of revenue for the railroads that carried minerals. Among other mining ventures, Schiff handled the Guggenheim family purchase of Anaconda Copper in 1898. Schiff ’s work on behalf of Daniel Guggenheim (1856-1930), the son of Swiss-Jewish immigrant Meyer Guggenheim (1828-1905), underscored the European ties that were sometimes critical to the entrepreneurial aspects of his banking activity. Schiff knew Guggenheim and introduced him to Cassel in 1900.25

On rare occasions, Schiff knitted together his business and charitable endeavors. Working with his friend, the railroad builder, manager, and fi nancier James J. Hill (1838-1916), Schiff came up with a plan to settle Russian-Jewish immigrants on farms in the Pacifi c Northwest. The plan responded to a variety of concerns and objectives: humanitarian, political, and fi nancial. First and foremost, the settlement plan aimed to off er Russian-Jewish immigrants a better life outside of overcrowded East coast tenements. At the same time, the plan also served the larger political goal of removing Russian-Jewish immigrants from the scrutiny of anti-immigrant critics who viewed urban ghettoes as evidence of the need for immigration restrictions. Lastly, fi nancial objectives played a role as well, for new settlements off ered the promise of increased railroad traffi c and thus greater prof- itability. This being the case, the plan represented a unique fusion of Schiff ’s charitable activity on behalf of Russian-Jewish immigrants, his interest in social and political questions, in general, and his business interests, particularly in the railroad sector. The plan also demonstrated Schiff ’s willingness to use the resources at hand to experiment with new solutions to intractable problems, though in this case the attempt proved unsuccessful.26

Railroad presidents reached out to Schiff , seeking his help in capital- izing their businesses; they invited him to sit on their boards, turned to him for advice and counsel in their business activities, dined with him at home and, in some instances, developed close personal friendships with him. Hill, for instance, trained Schiff ’s son Mortimer in the railroad business, and Edward Henry Harriman (1848-1909) became a lifelong friend. But Schiff was their second choice; only aft er J.P. Morgan (1837-1913) rejected their business, either because of the risk 25 Cohen, Jacob H. Schiff , 24. involved or for other reasons, did they take their business to Kuhn, Loeb. 26 Ibid.,118.

HEILBRUNN | JACOB H. SCHIFF 219 Schiff , for his part, never accepted any business that Morgan might want. Aft er Kuhn, Loeb decided not to pursue business with Atchison Railroad in 1905, Schiff off ered the following words of explanation to banker Edgar Speyer, “We have always tried to abstain from interfering with the existing arrangements of our neighbors, and since Morgans have for some time been doing the Atchison Company’s business, we would not be willing to force ourselves into this against the desire of Morgans.” 27

Schiff always kept investors informed of ﬁ nancial and political developments that aff ected the railroads in which they invested. He even relayed climate forecasts to help investors predict agricultural productivity, an important source of railroad freight and, therefore,

27 Jacob Schiff to Edgar one key indicator of railroad proﬁ tability. For example, in 1882, he Speyer, January 10, 1905, advised Cassel that “there will be no change [in business conditions] Jacob Schiff Papers. until we get deﬁ nite news about crop conditions. Thus far the news 28 Jacob Schiff to Ernest has been very favorable, but if the cold and wet weather keeps on, Cassel, 1882 (n.d.), Jacob 28 Schiff Papers. we shall have bad times in this country.”

29 Jacob Schiff to Ernest Cassel, Schiff befriended investors and invited them to his home, arranged Robert Fleming, Noetzlin, Jacob Schiff Papers, passim. working trips to inspect transcontinental rail lines throughout the United States, and introduced investors to American presidents.29 30 Crédit Mobilier of America, a company formed by Union Earning the confi dence of clients was always a key factor in Schiff ’s Pacifi c, created a confl ict of success. He joined Kuhn, Loeb only a couple of years aft er two major interest by giving and selling stock to infl uential sena- events had rocked the nation, undercutting public confi dence in the tors, congressmen, and the railroad sector and in industry in general. First, there was the corrup- vice president, all whom then stood to gain from the com- tion scandal involving Crédit Mobilier of America,30 the construction pany’s profi ts. As a result of company for America’s Union Pacifi c Railroad. In 1872, it came to this situation, Congress failed to regulate Union Pacifi c’s light that the company had bribed members of Congress and federal construction costs, which the federal government had government through sales and gift s of stock, a move that had brought subsidized. Crédit Mobilier the company enormous profi t at the public’s expense. The follow- made enormous profi ts, and the congressmen profi ted per- ing year saw the fi rst bankruptcy of fi nancier Jay Cooke’s Northern sonally. See U.S. Congress, Pacifi c Railroad. Against the backdrop of these events, Schiff paid House, “Report of the Select Committee of the House of close personal attention to the interests of investor clients and helped Representatives, Appointed shore up their confi dence. under the Resolution of Janu- ary 6, 1873, to Make Inquiry in Relation to the Aff airs of In the interest of his investors, Schiff insisted that the companies in the Union Pacifi c Railroad which they invested be conservatively managed. He worked closely Company, Credit Mobilier of America, and Other Matters with railroads to ensure that they set aside capital to fund their Specifi ed in Said Resolution” debt obligations. He frowned on railroad managers who paid out (Washington, DC, 1873), 3, 4, 7; and http://cprr.org/ all their profi ts to stockholders looking for high dividends. In a let- Museum/Credit_Mobili- ter to Stuyvesant Fish (1851-1923), president of the Illinois Central er_1873.html (viewed August 12, 2012). Railroad Company, Schiff commended Fish for the “prudent policy”

220 GHI BULLETIN SUPPLEMENT 12 (2016) The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

that Illinois Central pursued in “laying something aside for improvements and betterments in times of prosperity.” This had not been the policy of the Louisville & Nashville Railroad, whose “ﬁ nancial ills and troubles,” according to Schiff , arose from “a forcing in the payment of dividends, when surplus earnings would have better gone into improvements and betterments, for which purposes, instead, bonds were liberally issued.” Schiff reminded Fish that many other railroad companies operated in a similar, unsound manner, and as a result “were forced into bankruptcy largely because surplus earnings were paid out to the stockholders.”31

When Schiff recommended investments, he either took a board position or became an advisor to management. His practice of casting proxy votes for the German, English, and French clients he represented gave him a voice in management. By building close personal relationships with railway management, he could better ensure the investors whom he advised of the ﬁ scal soundness of their investments. But by 1906, he would withdraw from all board positions in businesses in which his clients invested, as a result of public opposition to such practices.

America’s economy experienced frequent cyclical fi nancial crises during the last decades of the nineteenth century. The 1893 depression in America was unusually severe, resulting in massive unemployment, homelessness, and poverty. Many railroads were thrown into bankruptcy. Among the railroads that seemed beyond recovery was the Union Pacifi c. Business writer Bertie C. Forbes (1880-1954) described the Union Pacifi c as “a battered, bankrupt, decrepit stretch of rust.”32 America’s fi rst transcontinental railroad, the Union Pacifi c was built with an unusual amount of federal government involvement, including land grants from the public domain, direct monetary 31 Jacob Schiff to Stuyvesant subsidies, and free timber and building materials from lands of the Fish, September 20, 1899, United States — all of which complicated its fi nances and ensured Jacob Schiff Papers. that Congress and the public were much more involved than usual 32 Bertie Forbes, Men Who in any eff orts to reorganize it.33 Are Making America (New York, 1919), 330.

In 1895, Schiff and Kuhn, Loeb undertook the reorganization of the 33 Cleveland and Powell, Union Pacifi c Railroad.34 As a result of this mammoth eff ort, Kuhn, Railroad Promotion, 249, 257; Maury Klein, The Loeb became so closely identifi ed with Union Pacifi c that the railroad Life and Legend of sometimes was referred to as the Kuhn-Loeb line. Schiff ’s success E. H. Harriman (Chapel Hill, 2000), 106-107. in reorganizing Union Pacifi c generated large profi ts for Kuhn, Loeb and secured its status and reputation as the second largest private 34 “American Stock Markets,” Manchester Guardian, investment bank in New York aft er Morgan. October 12, 1895, 5.

HEILBRUNN | JACOB H. SCHIFF 221 In the course of reorganizing Union Pacifi c, Schiff worked with Edward H. Harriman, an investment banker turned railroad magnate who was intent on taking it over. Schiff recognized Harriman’s genius and helped him become director and eventually chairman of Union Pacifi c. In the process, Schiff won a lifelong friend and business associate. Schiff became Harriman’s banker, growing his own fi nancial resources as well as those of Kuhn, Loeb as Harriman extended his control over a large swath of America’s rail system. Aft er Union Pa- cifi c, Schiff and Kuhn, Loeb went on to reorganize other railroads, earning large commissions for managing the transactions, oft en ten percent of the value of the fi nancings.35

Schiff ﬁ nanced the Pennsylvania Railroad from 1881 until his death, handling transactions amounting to approximately half a billion dollars. When the railroad ambitiously pursued the construction of a tunnel under the Hudson River and a massive station in New York City, Schiff , understanding that the plan would beneﬁ t not only the

35 Forbes, Men Who Are Mak- railroad but New York City as well, used his political infl uence in ing America, 330; Klein, E.H. New York City to facilitate the project. Schiff was particularly proud Harriman, 107-17; “Lays Railroad Ills to Banking of his work with the Pennsylvania Railroad, and his close relation- Control,” New York Times, ship with its management extended across successive administra- February 1, 1915; “Wabash Syndicate Formed; Kuhn, tions. Proudly displayed on his offi ce wall were two cancelled loan Loeb & Co. and Allies Under- checks from Kuhn, Loeb to the Pennsylvania Railroad. They had write Reorganization Plan,” New York Times, May 1, 1915; been issued within a six-month period, one for $49,098,000 and the “$41,420,000 for MO.P. other for $62,075,000.36 Schiff ’s primary competitor in the business By $50 A Share Tax; Kuhn, Loeb & Co. Reorganization of providing commercial credit to railroads was J. Pierpont Morgan Plan Provides for Reduction and his brokerage fi rm.37 of Bonded Debts,” New York Times, July 7, 1915; “Security Owners Indorse In the years leading up to World War I, Schiff increasingly found ‘MOP’ Plan; Kuhn-Loeb Program for Missouri Pacifi c’s himself called upon to work with Morgan on fi nancial matters. Schiff Reorganization is Likely to collaborated with Morgan in 1905 on Pennsylvania Railroad stock Succeed,” New York Times, 38 December 16, 1915. securities. In 1914, the two banking houses, working together, res- cued New York City from a potential fi nancial debacle when Britain 36 Adler, Jacob H. Schiff , vol.1, 72-77; Birnbaum, Our Crowd, exercised its right to redeem certifi cates for gold. In this instance, 177. Schiff succeeded in convincing the Rothschild bankers to secure the 39 37 Ron Chernow, The House of gold that New York needed. Morgan: An American Banking Dynasty and the Rise of Mod- Schiff engineered railroad fi nancings in his triple role of banker, in- ern Finance (New York, 1990), 89-90. vestor, and lender, believing that his work was in the best interests of the railroads, his clients, and the nation. Over time, however, 38 Adler, Jacob H. Schiff , vol. 1, 77-78. Schiff and other bankers came under increasing public scrutiny. It started back in the 1870s with the Grangers, an organization of 39 Chernow, House of Morgan, 185. farmers who fought the unfair practices of railroad tycoons and

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sought government regulation of the industry. Their concerns were adopted and subsequently advanced by the Populists, by Progres- sive reformers, and by the American public at large. Their protests were directed at railroad executives’ interlocking directorates, long haul-short haul rate disparities, free passes, rebates, and kickbacks, all of which were viewed as evidence of serious wrongdoing. In the ﬁ rst decade of the twentieth century, journalists Lincoln Steff ens (1866-1936), Ida Tarbell (1857-1944), and Ray Stannard Baker (1870- 1946), all of whom earned great renown as muckrakers, captivated their audiences with highly publicized accounts of anti-competitive behavior that enriched wealthy capitalists at the expense of farmers and small businesses. Politicians tried to respond to the public demand for legislation that would regulate the railroads and put an end to anti-competitive activity. Schiff ’s work landed him squarely in the middle of the controversies that dominated the politics of this era.40

Going against public opinion, Schiff supported “community of interest” arrangements among railroads, replacing some competition with cooperation to make railroads profi table. He also recommended noncompetitive ownership of railroads. According to Schiff , eliminating duplicate railroad lines would make railroads profi table and benefi t the nation. He pointed to Germany’s encouragement of integrated industry as an example of sound industrial organization. Aft er the U.S. Supreme Court ordered the dismantling of the Standard Oil trust, Schiff called the court’s ruling “destructive.” Schiff took his argument for community of interest and noncompetitive ownership to President Theodore Roosevelt in 1902, 1905, and again in 1907, but failed to persuade the president that monopoly practices could benefi t the American public. 41

When Harriman decided to buy a controlling interest in the Chicago, Burlington and Quincy Railroad to ensure Union Pacifi c’s entry into the Chicago market, secure its western routes, and prevent Hill’s railroads from driving him out of business, he ran up against Hill’s control of the Burlington. That railroad, together with Hill’s Great Northern and Northern Pacifi c railroads, gave Hill control of western rail traffi c. Hill was backed by Morgan; Harriman worked with Schiff . Their subsequent competition to acquire a controlling stock share in the Northern Pacifi c Railroad triggered the Wall Street Panic of 1901. Schiff devised 40 McCraw, 9; Usselman, a solution to rescue Wall Street and bring Hill and Harriman to the 119-20, 328-30. table. With order restored, Morgan formed a holding company, the 41 Adler, Jacob H. Schiff, vol. Northern Securities Company, one of the world’s largest corporations 1, 42-44, 46-50.

HEILBRUNN | JACOB H. SCHIFF 223 at the time. Known by its detractors as the Great Railway Trust, the Northern Securities Company provided Theodore Roosevelt with a prime opportunity to make political hay before the next presidential election, and he directed his attorney general to ﬁ le suit against the holding company as an illegal restraint of trade. By a 5-4 margin, the U.S. Supreme Court ruled that Northern Securities was an illegal combination and ordered its dissolution. Schiff may very well have fumed about America’s unwarranted fear of business concentrations as this giant step in the writing of American business law occurred.42

Schiff joined the boards of more than twenty railroads, banks, life insurance companies, and other corporations to oversee policy and ensure sound fi nancial management on behalf of his investor clients. Banks and insurance companies that invested in railroads were of particular interest to him, and he made important connections that benefi ted his business. For instance, as a director of the Franklin National Bank of Philadelphia, he befriended the bank’s president, Henry Tatnall (1855-1939). When Tatnall became treasurer of the Pennsylvania Railroad in 1901, he called on Schiff to handle its fi nancing. As a board member of National City Bank, the bank associated with the Rockefeller family, Schiff came to know the bank’s president, James Stillman (1850-1918), who played a major role in fi nancing the Union Pacifi c and other railroads.43

Schiff ’s position on various boards sometimes drew public scrutiny. For example, his association with the Equitable Life Assurance Company was viewed as problematic by some. Schiff served as a director of Equitable Life Assurance Company from 1893 until 1905, during which time Kuhn, Loeb sold railroad securities, at a profi t, to Equitable. Though Schiff sought legal advice during his dealings 42 “Wall Street Was Taken By with Equitable, and never monopolized its purchase of securities nor Assault,” New York Times, May 12, 1901, 3; Northern profi ted unduly from the transactions, Schiff and Kuhn, Loeb became Securities Co. v. United States, enmeshed in a widely publicized state investigation of Equitable’s 193 U.S. 197 (1904); Albro Martin, James J. Hill and the management in 1905. Schiff ’s forthright public testimony preserved Opening of the Northwest (New his reputation, but he and Kuhn, Loeb suff ered negative publicity in York, 1976), 496-520. the course of the investigation. For the fi rst time, the public learned 43 Adler, Jacob H. Schiff , vol. 1, about the enormous volume of trade that Kuhn, Loeb handled. From 77; “Jacob H. Schiff Returns; Expansion in Germany Due to 1900 to 1905, Kuhn, Loeb sold $1.75 billion worth of securities ($1.75 Government Aid to Trade, He billion in 1905 is equal to approximately $44.7 billion in 2010).44 Says,” New York Times, Au- gust 27, 1911. Roosevelt’s aggressive regulation of business, together with market 44 Adler, Jacob H. Schiff , vol. uncertainties, helped trigger the Panic of 1907. In response, Morgan 1, 185-94; Birnbaum, Our Crowd, 328-29. and Schiff banded together to help rescue an uncertain economy.

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Their eff orts won them little public favor, however. Whereas Morgan and Schiff saw themselves as serving the greater good, the public perceived them, and other bankers, as the problem, not the solution. Fed by muckrakers’ reports, public opinion lashed out against the so-called Money Trust. In response, Congress held investigatory hearings. The Pujo hearings, named aft er Congressman Arsène Pujo (1861-1939), chairman of the House Banking and Currency Commit- tee, lasted from May 1912 through February 1913. Targeting Morgan but also including Schiff and Kuhn, Loeb in its investigation, the committee’s counsel, Samuel Untermyer (1858-1940), sought to expose American bankers’ anti-competitive behavior.45 Schiff was called to Washington to testify. Answering evasively, Schiff appeared defensive and guarded in his responses. He admitted that New York City banking resources had become concentrated, that Kuhn, Loeb had handled Union Pacifi c securities issues exclusively for at least ten years in the absence of competitive pricing, and that his fi rm and Morgan did not venture into each other’s territory. Untermyer’s intense questioning of Morgan and Schiff also focused a spotlight on Wall Street bankers’ ties with the industries they fi nanced. Pro- gressive lawyer Louis Brandeis (1856-1941) later wrote Other People’s Money, which defamed Kuhn, Loeb for the fees and commissions it earned during its reorganization of Union Pacifi c Railroad.46

Aft er the publication of the Pujo Committee Report, Congress passed the Federal Reserve Act of 1913, which called for the creation of the 45 Hawkins, Richard, Federal Reserve Bank. Schiff campaigned for the bank, arguing that a “Samuel Untermyer,” in IE. central bank and currency reform would improve America’s economic 46 U.S. Congress, House, system. Periodic economic panics might be avoided if the U.S. took “Report of the Committee Appointed Pursuant appropriate action, Schiff insisted. In three speeches before the New to House Resolutions York State Chamber of Commerce in 1906, Schiff had recommended 429 and 504 to Investi- gate the Concentration the establishment of a central bank, like the Bank of England, to of Control of Money and remedy America’s inelastic currency problems. Schiff ’s crusade for Credit” (Washington, DC, 1913), 102, 104-106; a central bank, waged simultaneously by his brother-in-law Paul Cohen, Jacob H. Schiff , 30- Moritz Warburg (1868-1932), led to the creation of the Federal Re- 32; “Schiff to Testify,” New York Times, December 8, serve Bank in 1914 and to Warburg’s appointment to the bank as its 1912; “$25,000,000,000 only German-born member.47 Resources Represented in 180 Men,” New York Times, December 19, The Woodrow Wilson administration also pushed for additional 1912; “Schiff Believes in legislation to regulate and control banking and limit business com- Individual Concentration,” New York Times, January binations. In 1914, Congress passed the Clayton Antitrust Act and 17, 1913, 1. President Wilson signed it into law, prohibiting horizontal restraints 47 Adler, Jacob H. Schiff, vol. on trade and interlocking directorates. Schiff was forced to change 2, 277-88.

HEILBRUNN | JACOB H. SCHIFF 225 the way that he did business. The interlocking directorates and holding companies that Schiff favored to limit ruinous competition and promote proﬁ tability had become illegal.48

Schiff combined business with conscience when he elected to ﬁ nance loans that enabled Japan to defeat Russia in the Russo-Japanese War of 1904-05. At the start of the war, Japan was widely perceived as the weaker of the two parties, but Schiff disliked Czarist Russia, which continued to persecute Jews. He therefore decided to arrange loans for Japan, knowing that Kuhn, Loeb might proﬁ t at the same time. Working with Ernest Cassel in London, Schiff secured English bankers’ cooperation. He won support from American bankers as well, and included German investors in subsequent war loans. His eff orts won him the gratitude of the Japanese government and people. Feted in Japan in 1906, he dined with the emperor, a rare invitation for a Westerner.49

Schiff was also very interested in opportunities in China; he worked with the State Department to participate with Morgan in a syndicate to invest in China. Diversifying into central and South America, Schiff and Kuhn, Loeb ﬁ nanced businesses throughout the western hemisphere.50

Social Status and Personality 48 Clayton Act, http://www. stolaf.edu/people/becker/ Anti-Semitism was pervasive in New York City during Schiff ’s life- antitrust/statutes/clayton. html (viewed August 12, time. By necessity, Schiff had to work for a German-Jewish banking 2012). ﬁ rm; no other banking ﬁ rm would have employed him. Morgan, for 49 “Mr. Schiff on Japan’s Loan,” instance, referred to Schiff as “that foreigner.”51 His bank did busi- New York Times, May 18, 1904; “Jacob H. Schiff Going ness with Kuhn, Loeb only reluctantly until the early 1900s, at which to Japan,” New York Times, point they cooperated more readily. Schiff , sensitive to his social January 7, 1906; “Harriman and Schiff Dine Japan’s position vis-à-vis Morgan, avoided antagonizing him. J.P. Morgan Financier,” New York Times; would not socialize with Jews. Morgan, whose favorite hobby was January 10, 1906. sailing, famously said: “You can do business with anyone, but only 50 Cohen, Jacob H. Schif f, 33-36. sail with a gentleman.” 52 Aft er John Pierpont “Jack” Morgan (1867-

51 Cohen, Jacob H. Schiff, 24. 1943) succeeded his father as head of the Morgan ﬁ rm, Schiff became Comp. Susie J. Pak, Gentle- more forthright in his dealings. For instance, Schiff demanded an men Bankers: The World of J.P. Morgan (Cambridge, MA, explanation from Jack Morgan aft er he left Kuhn, Loeb out of an Erie 2013), esp. chapter 3. Bonds syndicate.53

52 Ibid., 14. As a German banker of the Jewish faith, Schiff served on civic boards 53 Jacob Schiff to Mortimer and charities with American Protestant businessmen and philanthro- Schiff , March 23, 1915, Jacob Schiff Papers. pists as well as German and Jewish men, but he socialized primarily

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with other German Jews. New York City establishment social clubs did not admit Jews, so they formed their own clubs. One would not have expected the Morgans to invite the Schiff s to their home, though they might meet together at the Waldorf Astoria Hotel for charitable fundraisers. The pages of the Social Register off er ample evidence of the anti-Semitism that prevailed in New York society at the time. Although Schiff was among the wealthiest men in New York, the Social Register excluded him. Most non-proﬁ t institutions denied him a seat on their boards despite his muniﬁ cent donations to the arts, museums, libraries, and colleges. 54

A man guided by strong principles, Schiff addressed anti-Semitism where he thought he could make a diff erence. For instance, when the episcopal bishop of the New York diocese, Henry C. Potter (1835-1908) in a letter to Schiff , remarked that prejudice against Jews derived from the dishonesty of Jewish Wall Street bankers, Schiff responded with a four-page letter that showed that Jewish fi rms on Wall Street were more honest than others.55 On another occasion, he took issue with a comment by his friend Charles Eliot (1834-1926), president of Harvard University, about international Jewish banking ties.56 On principle, Schiff refused to do business with anyone who publicly disparaged Jews, and he turned down business opportunities even when this entailed fi nancial loss. He would not join the Reading Railroad syndicate in 1887, for example, “though it off ered a sure profi t,” because the Reading’s president had publicly insulted Jews “in a very vulgar manner.” Kuhn, Loeb repeatedly rejected Read- ing Railroad business. “I should be ashamed before myself and my children if I acted otherwise,” Schiff explained.57

Schiff ’s principles cost Kuhn, Loeb all underwriting business with Russia at a time when other ﬁ rms participated without compunc- tion. Because of Czarist persecution of Jews, Schiff prohibited Kuhn, Loeb from lending to Russia. He was indignant when Jewish bankers 54 Cohen, Jacob H. Schiff , Rothschild and Bleichröder undertook large Russian ﬁ nancial trans- 53-54. actions, but he did not depart from his position. During World War I, 55 Jacob Schiff to Bishop Schiff contended with anti-German sentiments, and his failure to Potter, January 18, 1898, extend loans to Russia (which, together with France, Britain, and later Jacob Schiff Papers. the U.S., opposed Germany and the other Central Powers in the war) 56 Jacob Schiff to Charles only made matters worse. Still, he remained unrelenting and chose to Eliot, March 14, 1917, Jacob Schiff Papers. follow his conscience rather than off er support to Czarist Russia. In 1915, when Morgan led American bankers in providing funds for the 57 Jacob Schiff to Ernest Cas- sel, March 6, 1888, Jacob Allied war eff ort, Kuhn, Loeb declined to participate aft er it became Schiff Papers.

HEILBRUNN | JACOB H. SCHIFF 227 known that Britain’s Lord Chief Justice, Rufus Isaacs (1860-1935), refused to limit Russian access to Allied loans. Kuhn, Loeb faced public criticism as a result of their abstention, but Schiff and the ﬁ rm responded creatively by underwriting humanitarian loans, including a 50-million-dollar loan to Paris, France (approximately $1.12 billion in 2010). The loan was to alleviate suff ering by funding hospitals, orphanages, and providing aid to widows and the unemployed.58

Schiff married American-born Therese Loeb (1854-1933), a daughter of his partner Solomon Loeb, in 1875. Their marriage followed a pattern common among European banking families: business and family were united; capital was preserved. Jacob and Therese Schiff had two children, Frieda (1876-1958) and Mortimer (1877-1931). Mortimer was groomed for partnership in Kuhn, Loeb. His education and training, carried out under his father’s rigid guidance, off ers evidence of Schiff ’s own uneven assimilation. Mortimer attended a private school for German-Jewish boys in New York City. Upon Mortimer’s graduation, Schiff , who believed that his son was not yet ready for college, tried to secure a place for him at Groton, a largely Episcopal college preparatory boarding school. When Groton refused to waive its requirement that young men participate in religious training, Schiff sent his son to college. He chose Amherst College rather than Harvard University, despite Mortimer’s clear preference for the latter. Schiff did so because he believed that a climate of frivolous dissipation prevailed at the Ivy League university. In the end, Schiff pulled Mortimer out of college altogether, despite his ﬁ ne academic record. This decision was motivated by Schiff ’s desire to see his son educated in the German manner, that is, by means of apprenticeships. Instead of attending German universities, as wealthy Americans might, Mortimer learned the railroad business from railroad magnate James J. Hill in the American Northwest and then learned banking in London under the tutelage of Schiff ’s German-born friend, the ﬁ nancier Ernest Cassel.59

Schiff ’s daughter, Frieda, was sent to Brearley, New York City’s ﬁ nest

58 “Kuhn, Loeb to Lend academic school for girls. She may have been the ﬁ rst Jewish student $50,000,000 to Paris; Loan accepted by that exclusive school. On a visit to Frankfurt, she met and ‘to Alleviate Suff ering’ Arranged for City that Never later married German-born Felix Warburg (1871-1937), son of Schiff ’s Borrowed Outside France,” former employer, M. Warburg of Hamburg. Felix moved to New York New York Times, September 28, 1916. and became a partner in Kuhn, Loeb. He participated actively in the Schiff family tradition of philanthropy as well. Felix’s brother Paul 59 Cohen, Jacob H. Schif f, 4, 6, 13. (1868-1932) soon married Jacob Schiff ’s young sister-in-law, Nina

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Loeb (1870-1945). He also moved to New York and joined Kuhn, Loeb. From 1916, Paul Warburg served on the Federal Reserve Board, founded in 1914, thanks to the crusade that he and Schiff waged on behalf of a U.S. central bank and currency reform. Though the young Schiff s, Loebs, and Warburgs all married German bankers’ children in America, each marriage was reportedly a love match and not an arranged union. It is likely that the children were keenly aware of the expectations that came with their role as scions of banking families. Other partners in Kuhn, Loeb also entered into suitable marriages that united business and family. Throughout Schiff ’s lifetime, the leadership of Kuhn, Loeb was made up entirely of German immigrants or the children of German immigrants.60

A patriarch in the traditional German mold, Schiff headed a close- knit family whose wellbeing and continued adherence to American, German, and Jewish values was critical to him. His letters to close associates are replete with details of his family life. Aft er his responsibilities at Kuhn, Loeb lessened somewhat, it seemed that he was always departing for or returning from a vacation with children and grandchildren. These were the times that he valued most. Apparently, Schiff was known as a somewhat tyrannical presence in his family. Like his own overbearing, Schiff demanded that his wife and children perform to his expectations. He transmitted his values of hard work, frugality, charity, and communal responsibility to his children and grandchildren.

Schiff ’s ongoing use of German reﬂ ected his love for the language and culture of his homeland. Schiff corresponded with friends and associates in German and spoke German with his family as well. Before World War I, many Americans held the German language and German culture in high esteem. With the advent of war, however, speaking German became cause for suspicion, and Schiff refrained from using it in public. Schiff ’s language skills helped him to develop and maintain European business connections and to keep in touch with German family members. Schiff also used written English well, and he was known for his elegant, articulate letters to presidents, policy makers, colleagues, and newspaper publishers, among others. Nevertheless, his spoken English was always marked by a strong German accent.

Schiff always maintained his dedication to Judaism but modestly Americanized his expression of faith. Orthodox in Germany, he affi liated 60 Ibid., 6-7.

HEILBRUNN | JACOB H. SCHIFF 229 with Reform Judaism in New York City, where he joined two prominent congregations of Jews who mostly hailed from German lands. He tithed while still a young man, not waiting to accumulate wealth before beginning his charitable endeavors. He scheduled lunch meetings on the Sabbath when necessary, an accommodation that conﬂ icted with traditional Jewish observance. At the same time, he worked hard to maintain the traditions of his German-Jewish background. Schiff prayed daily. He brought his family together for Friday night Sabbath observance. Schiff refused to let business interfere with religious observance, and he encouraged his family as well as Jews with whom he did business to be respectful of religious observance.61

As an American Jew, Schiff oft en broke new ground in his business and charitable work. For example, in 1898, he was elected vice president of the New York Chamber of Commerce, becoming the ﬁ rst Jew to hold an offi ce in that organization. Thanks to his White House connections, he was asked to recommend a Jew for a cabinet position, another ﬁ rst.62

As a community leader, Schiff embodied a typology of responsibility that he had ﬁ rst encountered in Frankfurt’s Jewish community. It had been the tradition in Germany for Jews to belong to a Gemeinde, or community, that assumed responsibility for the social welfare and education of the Jews in that community. In America, Schiff acted as a community leader to secular as well as Jewish constituencies.

Although Jewish life in America was centered on synagogues, Schiff became a kind of lay leader of the Jewish community beyond the boundaries of synagogue life. In many instances, Schiff worked independently to advance his charitable activities on behalf of Jews in America, Russia, and worldwide. He spoke to presidents, lobbied the State Department for action, raised funds, organized committees to distribute relief, and established schools and institutions. His favorite charity was the Monteﬁ ore Hospital and Home for the Aged, which he established in 1884 and on whose board he served as vice president from 1885 until his death. Whenever Schiff was in New York, he spent his Sundays visiting with the elderly residents 63 61 Ibid., 6, 100-101; Jacob Schiff of the Monteﬁ ore Home. Papers, passim. Schiff assumed responsibility for the care of Russian-Jewish immigrants. 62 Jacob Schiff to Simon Wolf, October 11, 1916, Jacob He worked to Americanize them while preserving their Judaism, Schiff Papers. and he invested in communal services to provide them greater ac- 63 Cohen, Jacob H. Schiff , 64-69. cess to quality healthcare, housing, education, and recreation. The

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Educational Alliance, a community center for immigrant youth in New York’s Lower East Side, offered night classes in Eng- lish and citizenship, providing a pathway to Americanization. Schiff served as its vice president and donated funds in support of it. Schiff also funded the non-sectarian Henry Street Settlement and Visiting Nurse Service, led by Lillian Wald (1867-1940), a New Yorker Figure 1: Jacob Schiff and of German-Jewish descent. One of the nation’s ﬁ rst settlement houses, New York City Mayor William Gaynor, 1913. Bain the Henry Street Settlement off ered social services to the poor of New News Service. Courtesy of York’s Lower East Side. Schiff also helped fund the Hebrew Technical the Library of Congress. Institute in New York, which had been founded in 1884 by his brother- in-law Morris Loeb (1863-1912) to train men in craft s and mechanics.64

Concerned with immigrant Jews’ religious needs, Schiff played a leading role in rebuilding the defunct Jewish Theological Seminary (JTS) as a training ground for Conservative Jewish rabbis and teachers. Recognizing that Russian Jews were abandoning religious observance but were uncomfortable with American Reform Judaism, Schiff tried to create an American form of Judaism that immigrants would ﬁ nd welcoming. He personally funded JTS and took an active role in its administration. His daughter Frieda, who took over her father’s seat on the board aft er his death, donated her Fift h Avenue home to JTS for use as a Jewish museum.

Schiff supported all Jewish denominations, knowing no Jews who were alien. Thus, he funded teachers’ institutes not only at JTS but also at Hebrew Union College, training grounds for Reform rabbis and teachers, and Yeshiva University for Orthodox rabbinic training. Similarly, 64 Ibid., 90-95; “Education- he funded Reform, Conservative, and Orthodox Jewish houses of wor- al Alliance,” http://www. edalliance.org/index.php? ship. To bring Jewish learning to the community, he donated America’s submenu=OurHistory&sr largest collection of Judaic writings to the New York Public Library c=gendocs&ref=History&c ategory=AboutUs (viewed and sponsored Judaic libraries at the Library of Congress and Harvard May 12, 2011).

HEILBRUNN | JACOB H. SCHIFF 231 University.65 Remem- bering the loneliness of his own early years in New York, Schiff helped established the 92nd Street Y, a branch of the Young Men’s Hebrew As- sociation, to provide cultural, social, and recreational opportunities to foster Jew- ish continuity.66

Always alert to political issues, Schiff took note of increasing Figure 2: Knitting Class American anti-Semitism toward Russian-Jewish immigrants. The at the Henry Street Immigration Restriction League, which was organized by Harvard Settlement, 1910. Lewis Wickes Hine, photographer. graduates in 1894 and headed by the president of the Massachusetts Courtesy of the Library of Institute of Technology, lobbied nationwide to restrict Jewish and Congress. southern Italian Catholic immigration, contending that new immigrants, who apparently also brought crime and idiocy, threatened the American race. Congress responded to public pressure to cap immigration, repeatedly passing restrictions to limit the entry of “new immigrants.” Schiff reacted to legislative restrictions on ongoing immigration by reaching out to congressmen and presidents via letters, telegrams, and personal meetings, urging them to keep America’s doors open. A patriot and a Jewish communal leader, Schiff engineered the Galveston Movement, which diverted Russian Jewish immigrants away from New York to the Port of Galveston, Texas, from which point they found new homes throughout the south and Midwest. Schiff hoped that this would stem a wave of anti-Semitism that was seemingly fueled by visions of crowded New York City tene-

65 Cohen, Jacob H. Schiff , 76, 80, ments. Mindful of public opinion, Schiff recognized that there would 266n104. be a time when America’s doors would be closed to immigration.

66 A plaque in the Lexington Therefore, although he was not a Zionist, he supported the building Avenue lobby of the 92nd Street of institutions in Palestine for Russian-Jewish refugees, contributing Y honors Jacob Schiff ’s contributions. generously to Haifa Technikum (later called the Technion), an agricultural experimentation station, and other institutions and public 67 Cohen , Jacob H. Schiff , 153- 88. relief eff orts in Palestine.67

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Unlike Morgan, who shied away from politics, Schiff attempted to reform municipal government and to weigh in on national issues and international aff airs. As a businessman, Schiff followed and sought to inﬂ uence politics, frequently in instances where his clients’ investments were at stake. For example, when President Wilson and Congress threatened to take control of the nation’s railroads in 1916, Schiff sent Wilson a telegram carefully outlining the problems that government seizure (without accompanying compensation) would pose for investors, who had provided the necessary capital for the railroads. Schiff ’s business activities gave him access to U.S. presidents and Congressional leaders, and, over time, he used these contacts to promote not only his ﬁ nancial interests but also various social reforms that were dear to him. For example, Schiff sought to help persecuted Russian Jews secure better treatment in Russia and, when that proved impossible, refuge in America.

Foreign contacts also played a key role in Schiff ’s charitable eff orts. Schiff looked to London and Berlin for scientifi c expertise to help chronically ill patients in the Montefi ore Home and Hospital, an institution that he actively supported for thirty-fi ve years. He also helped manage Munich-born and Paris-based Baron Maurice de Hirsch’s (1831-1896) eff orts on behalf of Russian Jews in America; these eff orts centered on industrial education, agricultural colonies, and other philanthropic initiatives on behalf of immigrants.68

Recognizing Americans’ preference for democratic participation, Schiff participated in the founding of the American Jewish Commit- tee (AJC) in 1906, and increasingly pursued his leadership role in the Jewish community with AJC support. Initially established as a self-defense organization, the AJC fought persecution abroad and at home, quickly expanding its sphere of interest to cover other issues of concern to Schiff .69 68 Telegram from Jacob Schiff to President Wood- During World War I and the Eastern European pogroms that fol- row Wilson, December 16, lowed in its wake, Schiff aided Eastern European Jews and Jews in 1917, Jacob Schiff Papers; Cohen, Jacob H. Schiff , Palestine through generous donations via American organizations, 65-66. especially the Joint Distribution Committee. On a diff erent note, 69 Cohen, Jacob H. Schiff , 54. Schiff underwrote the construction of Harvard University’s Semitic Museum and then sponsored its Near East expeditions, which 70 Rachel Hallote, “Jacob H. Schiff and the Begin- 70 transformed American research in the area of biblical archaeology. ning of Biblical Archaeol- ogy in the United States,” Schiff also assumed a leadership role in New York City municipal American Jewish History, vol. 95, September 2009, aff airs, reforming the government and building civic institutions. For 225-47.

HEILBRUNN | JACOB H. SCHIFF 233 instance, over the course of many years, Schiff played an active role in reformers’ eff orts to end the Tammany machine’s control of New York City government. To achieve this and other reform goals, Schiff participated in the German-American Union of Citizens’ eff orts to clean up city government and the courts in 1894, the Good Govern- ment Club in 1895, the Committee of 70 in 1898, the Committee of 15 in 1902, and the Committee of 9 in 1905. These committees promoted mayoral candidates who sought to overthrow the Tammany machine, fi ght prostitution, gambling, the police, and corruption, and promote issues benefi tting the public welfare. Schiff provided advice and funding to anti-corruption city mayors, including Mayor William Gaynor (1849-1913). Under Mayor William Lafayette Strong (1827-1900), he served on the Board of Education. A believer in civic institutions, Schiff also took leadership roles in the New York Chapter of the American Red Cross, served as treasurer of Barnard College, and made substantial contributions to the New York Public Library, the Metropolitan Opera, the American Museum of Natural History, and the Metropolitan Museum of Art. He also funded a recreation center at Barnard College, on whose board he sat, to mark the fi ft ieth anniversary of his arrival in America, and he endowed a professorship at Columbia as well. 71

Approximately 5’3” tall and fi t, with a closely trimmed beard and moustache, Schiff cut a dignifi ed fi gure. He carried himself with the reserved bearing of a gentleman and was always elegantly attired. He readily gave money to many in need and encouraged family members to do so as well. His wife Therese occupied herself with numerous charities, and their daughter Frieda carried on the family’s philanthropic activities. Mortimer Schiff was an active supporter of many organizations, including the Boy Scouts of America, which he served as president in 1931. Schiff ’s grandchildren were also schooled in charitable giving from an early age. Schiff avoided ostentation himself and expressed concern whenever he detected it in his family. When his daughter and her

71 “United for Better Govern- husband built a Beaux-Arts style house on Fift h Avenue, he made ment,” New York Times, March his disapproval known. 22, 1894, 8; “Watchers at the Polls,” New York Times, Octo- ber 27, 1895; “City Farms on Schiff ’s sense of social justice, together with his concern for labor Vacant Lots,” New York Times, relations, prompted him to align with workers and union activists. He April 12, 1897; Louis Pink, Gaynor, The Tammany Mayor supported eff orts to restrict child labor, limit women’s work hours, Who Swallowed the Tiger: Law- and improve work conditions. In 1893, he worked for passage of a yer, Judge, Philosopher (New York, 1931), 220. New York state law to regulate child and women’s labor. He tried to

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provide assistance to unemployed workers through government job- creation measures to improve municipal infrastructure — a move that anticipated the later initiatives of Franklin Delano Roosevelt’s New Deal. Aft er the Triangle Shirtwaist Factory ﬁ re in 1911, Schiff helped organize and manage a Red Cross fund for the victims’ families, and he presided over a mass meeting organized by the pro-union Women’s Trade Union League to win better ﬁ re protection for factory workers. When garment workers walked out on strikes, he tried to mediate their disputes, while also working to improve tenement living conditions.72

Schiff took part in eff orts to end World War I, hoping to bring peace to the belligerents and forestall a lengthy battle. Part of his plan was to marshal American public opinion behind peace and to impress Americans’ wishes upon the warring powers. He also wanted the U.S. to refuse to provide munitions to anyone. Finally, he envisioned that peace would be negotiated with the help of the U.S. and without any power being victorious. Schiff ’s eff ort to take no side except that of peace off ered an attractive, though unrealistic, plan for a nation divided among ethnic groups.73

Schiff provided strong ﬁ nancial and public support for African- 72 “Our New York Weekly American education and civil rights. Schiff was an early member Bulletin,” Reform Advo- of the governing committee of the National Association for the Ad- cate, April 8, 1911, 285; “Domestic News,” Reform vancement of Colored People (NAACP), which was founded in1910.74 Advocate, April 22, 1911, His generous contributions enabled the organization to meet its 371; Adler, Jacob H. Schiff , vol. 1, 291-98. budget during its initial years. When President Wilson initiated the 73 Charles Eliot, The Road To- segregation of the federal civil service, Schiff joined in the NAACP’s ward Peace (Boston, 1915), 1913 letter-writing campaign to try to persuade the president, whose 144-46. presidential campaign he funded, to revoke his policy. Schiff willingly 74 W.E.B. DuBois, ed., The addressed participants in NAACP conferences, where his presence Crisis 1, no. 1 (November 1910): 12. Subsequent is- boosted the ﬂ edgling organization’s attendance. In 1919, Schiff sues of The Crisis also list signed the call for the First National Conference on Lynching and Schiff as a member of the organization’s committee. The Address to the Nation on Lynching.75 Schiff donated funds to Booker T. Washington’s Tuskegee Institute, which was dedicated 75 Annual Report of the Na- tional Association for the to African-American education, and supported other schools for Advancement of Colored Southern blacks.76 People (New York, 1920), 94.

76 Hasia Diner, In the Almost Immigrant Entrepreneurship Promised Land: American Jews and Blacks, 1915- While ethnicity created certain opportunities for Schiff , it also closed 1935 (Westport, 1977), the doors to others. As a German of Jewish faith, Schiff succeeded in 120, 125, 151, 168, 174, 188; Adler, Jacob H. Schiff , an American Protestant business environment. Schiff refused to violate vol.1, 314-18.

HEILBRUNN | JACOB H. SCHIFF 235 Jewish religious observance, even when doing so resulted in business losses. Despite his religion, Schiff ’s honesty, integrity, knowledge of the railroad business, and successful marketing of debt securities won him a loyal following among the leading American railway entrepreneurs, including Alexander Cassatt (1839-1906) and Samuel Rea (1865-1929) of the Pennsylvania Railroad, Edward H. Harriman of Union Paciﬁ c, and James J. Hill of Great Northern Railroad.

Ethnic solidarity provided leads to potential banking contacts in New York and Europe: men who, like Schiff , were excluded from positions with established Protestant banking houses. As discussed above, Schiff started out with the help of German immigrant bankers, including William Bonn, Leo Lehmann, and Henry Budge. German Jews in Europe who managed investments in commercial paper formed the core of Schiff ’s expanding network at a time when Gentile and Jewish bankers did not mix. Among those already referenced, Schiff worked closely with Ernest Cassel in London, who advised British investors, including King Edward VII, and Édouard Noetzlin of Paris, who became honorary president of the Banque de Paris et des Pays Bas and opened the French market to American railroad securities. Family marriages with the Hamburg-based Warburgs gave Kuhn, Loeb a valuable link to German banking. The fact that brothers Felix and Paul Warburg decided to relocate to New York aft er marrying into the Schiff -Loeb family is evidence of Kuhn, Loeb’s reputation in the international world of ﬁ nance.77

Some business networks were neither ethnic nor national in origin. Schiff also had diverse long-term friendships that developed from his business and, in turn, nurtured it. Schiff welcomed relationships with non-Jews and non-Germans and sought them out.78 Fleming was one of the men whom Schiff befriended and did business with over a lifetime; another was Baron Takahashi. Edward Baring, the 77 Adler, Jacob H. Schiff , vol. 1, later Lord Revelstoke (1828-1897) of London’s Baring Brothers & 13; Ron Chernow, The War- burgs: The Twentieth-Century Co. cooperated in many transactions with Schiff . In America, Schiff Odyssey of a Remarkable Jewish became close friends with and adviser to many railroad and banking Family (New York, 1993). leaders. Harriman was an intimate as well as a business associate. 78 See Jacob Schiff to Ernest Hill’s friendship with Schiff began in 1886. Rea, Cassatt, and Still- Cassel, May 28, 1883, Jacob Schiff Papers. In his letter, man called Schiff a friend. Seth Low (1850-1916), mayor of New York Schiff speciﬁ cally seeks an and president of Columbia University, and Charles Eliot, president English [emphasis in original] 79 ﬁ rm to serve as Kuhn, Loeb’s of Harvard University, were also among Schiff ’s friends. agent in London. Schiff successfully Americanized and yet always retained his identity 79 Adler, Jacob H. Schiff , vol. 1 and 2, passim. as a German and a Jew. Within two years of becoming a citizen, Schiff

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joined the New York State Chamber of Commerce, where he developed business connections and pursued philanthropic endeavors. He remained active in the Chamber of Commerce throughout his lifetime. Schiff was among the founding members of the American Red Cross and served as treasurer of the New York branch. These iconic American business and charitable organizations off er evidence of his integration into American business life.

Although Schiff was patriotically engaged in American civic life, he always maintained close ties to Germany. His extended family lived in Germany; he made at least twenty trips to Europe over the course of his lifetime. He valued German culture. Aft er making a $100,000 gift (approximately $2,320,000 in 2010) to Cornell University to endow German studies in 1912, Schiff funded the Amerika-Institut at the University of Berlin in 1913 — two signature eff orts to develop and reinforce ties between Germans and Americans. In 1914, Schiff joined with Frankfurt citizens to found the University of Frankfurt, then Germany’s only civically funded university. 80

Schiff combined an enduring love for the land of his birth with Ameri- can patriotism. On the occasion of his daughter Frieda’s religious confi rmation, Jacob and Therese Schiff donated Jewish ceremonial objects adorned with an American fl ag and an American eagle, refl ections of their patriotism, to New York City’s Temple Emanu-El. In a symbolic fusion of Schiff ’s American patriotism and German heritage, the ceremonial objects were made by Silberwarenfabrik Lazarus Posen Witwe, a fi rm based in Frankfurt and Berlin.81

World War I challenged Schiff to choose between his German and American loyalties. Before America joined the war eff ort, Schiff campaigned for peace. In 1916, Schiff joined with others to lobby for a negotiated peace among the warring nations. A lifelong Re- 80 “Schiff Gives Cornell $100,000,” The Penn publican, Schiff supported Wilson in 1916, trusting that Wilson Germania: A Popular would keep America out of the war. Although Kuhn, Loeb did not Journal of German History and Ideals in the United participate in Allied loans before America’s entry into the war Kuhn, States, vol. 1, January Loeb sponsored French municipal loans for humanitarian purposes 1912, 66-68. and sought to fund German municipal loans as well; however, the 81 “Therese Loeb Schiff ,” Federal Reserve Board banned the German loans. During the war, Jewish Women’s Archive, http://jwa.org/ency- Schiff was careful to accommodate anti-German sentiments. He clopedia/article/schiff - refrained from speaking German with his family in public. He modi- therese-loeb (viewed May 12, 2011); “Emanuel from ﬁ ed the terms of his endowment to Cornell, supplanting German Past to Present,” http:// studies with modern language studies. His modest peace eff orts www.emanuelnyc.org/ timeline.php (viewed May reﬂ ected not only his abhorrence of war but also his love for the 12, 2011).

HEILBRUNN | JACOB H. SCHIFF 237 land of his birth and the nation where his extended family still lived. When the U.S. entered World War I, Schiff set aside his campaign for peace and made clear that he supported his adopted country. Schiff invested heavily in U.S. Victory Bonds; at the time of his death, he owned Liberty bonds valued at $6,395,970 (approximately $69,600,000 in 2010).82

Conclusion Jacob Schiff , ambitious to make a future for himself in post-Civil War America, became one of this nation’s leading investment bankers. Building upon his European contacts, family, and ethnic networks, he syndicated loans for every railroad in America, contributing to the successful industrial expansion and development of his adopted country. Over the course of his lifetime, he managed loans to governments and businesses worldwide. Schiff built Kuhn, Loeb & Company into America’s second largest investment banking ﬁ rm. As a philanthropist, he continued the German-Jewish tradition of communal welfare, proving his loyal citizenship through contributions to American civic, cultural, and educational institutions that served every race and religion. He also took a lead in eff orts to reform municipal government in New York City.

First, Schiff personally learned the business of the railroads before selling their debt issuances. He obtained seats on their boards of directors or served as an advisor to management, overseeing their ﬁ scal aff airs. He traveled their routes, studied their equipment, and assessed their competition. He became friends with their presidents. He practiced the same careful tactics with every investment that he pursued to ensure that it was properly managed. Schiff won clients because he carefully tended their investments.

Second, Schiff personally apprised European investors of political and economic conditions that promised to have an impact on their American investments; he did this primarily through frequent cor-

82 “Jacob H. Schiff Left respondence and personal visits. Third, Schiff became known for $34,426,282 Estate,” his sound judgment. Financial writer Bertie C. Forbes opined that New York Times, March 3, 1922, 1. Kuhn, Loeb “issued more good investments and fewer bad ones than any other banking concern in America.”83 Finally, Schiff personally 83 Forbes, Men Who Are Making America, 328. observed the motto that he drummed into his partners: “Our only attractiveness is our good name and our reputation for sound advice 84 Birnbaum, Our Crowd, 179. and integrity.”84

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Schiff was a strong believer in the German model of integrated business, and he attempted to convince Americans that it would result in greater national prosperity. Despite his political inﬂ u- ence, his messaged failed to sway politicians, and he could not forestall government regulation of business practices. He preached an unpopular sermon to a skeptical public during the Progressive era, when Wall Street bankers and railroads earned the wrath of the public.

As a philanthropist, Schiff built institutions that advanced his ideals and social values, and he persuaded his family to continue the charitable eff orts that he initiated, at least into the next generation. But he could not bequeath his leadership abilities or his dedication to community nor could he permanently arrest the appeal of assimilation.

Bernice Heilbrunn is a Lecturer in Jewish Studies at the University of Houston, where she recently earned her Ph.D. in U.S. history. Her dissertation, “Faith as Motive for Reform: Emil G. Hirsch and Chicago Jewish Progressives,” examined Hirsch’s transnational roots and his focus on social justice. She has a B.A. and M.A. in History from Harvard and a J.D. from Harvard Law School. Her special interests are German-Jewish and American-Jewish history.

HEILBRUNN | JACOB H. SCHIFF 239

The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

MAKING ENTERTAINMENT AMERICAN: FLORENZ ZIEGFELD JR.

Heather Hester

Florenz Ziegfeld Jr. is recognized as an “American” icon who fundamentally changed show business in the United States. He established the modern Broadway show, used standardized beauty as an integrative marker of a rapidly changing immigrant society, and was fundamental for building American global leadership in entertainment. Beginning as a middle-class entertainment manager of German heritage, he combined the allure of ﬁ n-de-siècle European metropolitan culture with the needs and desires of the multicultural American nation. His shows mixed the popular appeal of vaudeville with seductive nudity while asserting an artistic appeal that made them acceptable to growing middle-class audiences. Despite drawing on various European theatrical traditions and frequently employing European talents, he produced an increasingly standardized “Ameri- can” product that, in some ways, preﬁ gured the Hollywood stars of the interwar period.

As such, Ziegfeld became a “glorifi er of the American girl,”1 who set show business trends for over three decades. He was among the impresarios who made the early twentieth-century Broadway theatre industry; his shows and publicity stunts challenged the moral code of late-Victorian era America, and toward the end of his career, he helped pave the way for the musical fi lm as a Hollywood genre. His “Ziegfeld girls,” sophisticated though somewhat naughty showgirl beauties with ornate costumes and lavish headdress became American cultural icons of the early twentieth century, embodying at once consumerist desires for commodifi ed femininity and the bold independence of the emerging New Woman.

As a producer, Ziegfeld was highly successful. His fortune of millions allowed for a legendarily extravagant lifestyle, which proved opportune for his business. Praised for his ability to ﬁ nd new tal- 1 “Florenz Ziegfeld Dies in ent, to produce stars, and market dream worlds for the masses, his Hollywood Aft er Long Illness,” Associated Press, career is an example of the rising American culture industry that July 23, 1932. had global impact: “Mr. Ziegfeld, in the course of any year, sees and 2 James Whittaker, “Ex- appraises the beauty of the most beautiful girls of America, for the tra! A Ziegfeld Follies Girl same reasons that Mr. Heinz views and chooses America’s most Need Not Be a Raving Beauty,” Chicago Daily Tri- nearly perfect pickles.”2 bune, March 26, 1922.

HESTER | FLORENZ ZIEGFELD JR. 241 Family and Ethnic Background Florenz “Flo” Ziegfeld Jr. was born in Chicago in 1867, March 21, to Dr. Florenz [Florence] Ziegfeld Sr. (1841–1923) and Rosalie de Hez (1850–1932). The father of the future famed producer was a native of Jever in the Grand Duchy of Oldenburg, Ger- many. Aft er earning a degree at the Leipzig Conservatory of Music, Ziegfeld Sr. felt that his skills would be better utilized in America, where fewer music institutions had been established. In November of 1863, he immigrated to United States and made his home in Chicago, with its thriving German- American community. There he began his career as a music instructor.3 The demand for his skillful instruction was high, and he soon saw the need for other accom- modations and additional resources for his students.4 By 1867, he had founded the Figure 1: Caricature of Chicago Musical Academy, renamed the Chicago Musical College Ziegfeld as “Florenzo the in 1872. Originally housed in the Crosby Opera House, it was an Magniﬁ cent,” 1923. From Judge, June 2, 1923. Cour- internationally acclaimed institute of music over which Dr. Ziegfeld tesy of the Library of presided until 1916. Aft er Chicago’s Great Fire of 1871 destroyed the Congress. establishment, it was reopened in the Central Music Hall.5 During his career, Dr. Ziegfeld brought many famous European masters to the U.S., among them Johann Strauss, Emile Suaret, and William Castle. In 1872, one year aft er the Franco-German war, he assembled the world’s most famous military bands from France, Germany, and 3 Passport Application, 1871, Britain at the Boston peace jubilee.6 roll 171, and Passport Application, 1899, roll 535, in Passport Applications, 1795– In 1865, Dr. Florence Ziegfeld, a burgher in Germany, met and 1905, ARC Identiﬁ er 566612 / soon married Rosalie de Hez, a French immigrant of a slightly MLR #A1 508, NARA Se- ries M1372, available online higher station than her betrothed; she “claimed a most distinguished through Ancestry.com (ac- grand-uncle, the count Étienne-Maurice Gérard, one of Napoleon’s cessed May 18, 2011); Ethan Mordden, Ziegfeld: The Man Who Invented Show Business (New York, 2008), 7; W.S.B. 4 Mordden, Ziegfeld, 8; U.S. on http://www.ancestry. Symphony, 1850–1905,” Il- Mathews, ed., A Hundred Years Federal Census, 1880, com (accessed May 18, linois Historical Journal 78:4 of Music in America: An Account Census Place: Chicago, 2011). (1985): 289–302, 291. of Musical Eff ort in America Cook, Illinois; Roll: 193; (Chicago, 1889), 482; Family History Film: 5 Mordden, Ziegfeld, 11; 6 “Florenz Ziegfeld, Mas- “Florenz Ziegfeld Is Dead In 1254193; Page: 643D; Robert McColley, “Classi- ter of Music, Claimed by Chicago,” Washington Post, Enumeration District: cal Music in Chicago Death,” Bridgeport Tele- May 21, 1923. 109; Image: 0209: copy and the Founding of the gram, May 21, 1932.

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generals.” In two years’ time, Florence and Rosalie welcomed their fi rst-born child, Florenz Edward Ziegfeld Jr.7 Carl, who would remain more loyal to his role in the Musical College than his elder brother, was the next born (1869-1921), followed by William (1872-1927), then daughter Louise (1875-1940) — each approximately three years apart in age.8 Raised in Chicago, the booming American metropolis in the late nineteenth century, the young Florenz Ziegfeld was at no loss for German infl uence. The family was among “the largest ethnic group in the city,” and very nearby Milwaukee was “a German colony in all but name.”9 Perhaps most consequential though, was the German infl uence of his father and his family. According to the U.S. Federal Census of 1880, the Ziegfeld household became home to extended German family, namely the paternal grandparents, Florence (1808- 1882) and Louisa Ziegfeld (1810-1896), who had followed their son to his newfound homeland.10

Father Florence, in addition to his musical college, was, in 1872, at the forefront of the pursuit to establish Chicago’s Wagner Verein and reportedly had been a student of Richard Wagner himself.11 Ziegfeld Sr. worked closely with German Chicago Symphony Orchestra director, Theodore Thomas (1835-1905), and had a deep appreciation of German composition, which he extended to his children. He educated Flo and his siblings in the music of “Beethoven, Schumann and Bach.”12 Taught to play the piano and trained in the musical arts, however, it is said of Florenz Ziegfeld, Jr. that for “all the Beethoven and Schubert that ﬁ lled his ears in youth, he developed no interest in 7 Ibid. classical music.”13 Instead, it was popular variety shows such as Buf- 8 “Carl Ziegfeld, Head of falo Bill’s Wild West Show, where he worked during the mid-1880s, Musical School, Is Dead,” which captured the imagination of young Ziegfeld. Chicago Daily Tribune, Au- gust 8, 1921; US Federal Census, 1880. Florenz Ziegfeld’s name was quite possibly the part of his persona which most closely resembled his father, as they diff ered in all mat- 9 Mordden, Ziegfeld, 7–8. ters of behavior and business; yet surely some credit is due Florence 10 US Federal Census, 1880.

Ziegfeld Sr. — “regarded as one of the greatest contributors to the 11 “The Wagner Verein,” development of art in America,” according to one obituary — for Chicago Daily Tribune, Oct. 29, 1872; “Florenz the career of Florenz Ziegfeld, Jr., “the man who invented show Ziegfeld [Sr.] Is Dead In business.”14 Both men were deeply invested in music and musical Chicago.” performance, but where Florence Sr. championed the bourgeois ideal 12 “Florenz Ziegfeld Dies in of classical music education, his son would use musical performance Hollywood.” to challenge such Victorian culture. 13 Mordden, Ziegfeld, 9.

Still, his father also introduced Florence, Jr. to the world of com- 14 “Florenz Ziegfeld [Sr.] Is Dead in Chicago”; mercial musical entertainment — if perhaps unwittingly. Named Mordden, Ziegfeld.

HESTER | FLORENZ ZIEGFELD JR. 243 musical director of the 1893 Columbian Exposition, Florence Sr. put his son in charge of finding European musical acts for the struggling Trocadero theatre he had established on the fair site. Instead of the desired classical performers, however, Flor- ence, Jr. focused on low-brow vaudeville and circus acts.15 As discussed below, this family business helped launch his career as a musical impresario.

Florence soon left the confi nes of his Chicago family, and it would be a few prominent women in his life that would signifi cantly shape the course of his career. On his journey from a young, middle-class Chicago talent promoter to a famous Broadway producer, Ziegfeld discovered the talented and beautiful vocal actress Anna Held (1872– 1918) in London in 1896 while searching for a Parisian beauty to fi ll a role in one of his upcoming plays. While “Flo” (as he was known to friends) seduced Anna with promises of Broadway fame, she seduced him with her feminine Parisian charm.16 Though she had been born in Warsaw and raised as Jewish by her French Jewish father and Polish Catholic mother, neither she nor Ziegfeld advertised those particulars when she immigrated to the United States to become a Parisian star and Mrs. Florenz Ziegfeld.17

Held was central to Ziegfeld’s rise as a stage producer. She had already had a successful career in Europe, performing at Berlin’s Wintergarten and headlining shows in Paris and London.18 In 15 “Florence Ziegfeld Jr.,” in Jan the United States she would become a big star. After rising to Pinkerton and Randolph Hudson (ed.), Encyclopedia of fame over the next ten years, then growing weary of life in the the Chicago Literary Renais- limelight, and evermore so of her husband’s more managerial, sance (New York, 2004), 390. less companionship role, Held divorced Ziegfeld in 1912.19 Curi- 16 Charles Higham, Ziegfeld (Chicago, 1972), 23, 29. ously enough, and despite reports that the two had been married in Paris, it was discovered that in fact Anna Held and Florenz 17 Linda Mizejewski, Ziegfeld Girl: Image and Icon in Cul- Ziegfeld, Jr. had maintained a fifteen-year companionship — ture and Cinema (Durham, constituting a common-law marriage — but had never in fact wed in 1999), 55. an offi ciated ceremony.20 18 Eve Golden, Anna Held and the Birth of Ziegfeld’s Broadway Ziegfeld’s later expansion from the Broadway stage to the Holly- (Lexington, 2000), 17. wood movie set was closely intertwined with his relationship to his 19 “Anna Held Warns Her second wife. Two years aft er his separation from Held, in April of Husband,” Boston Daily Globe, June 26, 1910; “Anna Held 1914, Ziegfeld married the much younger Ethelbert Appleton Burke Gets Divorce,” New York Times, (1885-1970), better known to the public as actress Billie Burke (fa- August 22, 1912. mous for her role as Glinda, the Good Witch, in the 1939 ﬁ lm The 20 “Divorce for Anna Held,” Wizard of Oz). Burke, who had studied in London and France and Boston Daily Globe, August 22, 1912; Higham, Ziegfeld, 44. performed in Great Britain and New York, transitioned, like her

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newlywed husband, from a theatre career to working in the movie business.21 On October 23, 1916, their only child, daughter Florenz Patricia “Patty” Burke-Ziegfeld (1916-2008), was born. Initially announced in the papers before having been named, she was simply called the “newest Ziegfeld beauty.”22 By then, Ziegfeld’s career and personal life were closely enmeshed with the emergence of the early-twentieth-century American entertainment industry, its culture of “stars,” and Broadway or Hollywood productions that would redefi ne “American” culture by challenging the strictures and stuffi ness of the Victorian era. The Figure 2: Florenz Ziegfeld beginnings of his career, however, were very much steeped in the with his wife Billie Burke (right) and their daughter German-American communities of his Chicago hometown. Patricia Ziegfeld (center). New York World-Telegram and the Sun Newspaper Immigrant Entrepreneurship Photograph Collection, Li- brary of Congress. Courtesy Refi nement, his father would have argued, was not Ziegfeld Jr.’s of the Library of Congress. forte, but when it came to his renowned — and marketable — eye for entertainment, he was undeniably a virtuoso. Ziegfeld Sr. provided him the fi rst opportunity to prove just that during the 1893 Chicago World’s Fair when Flo took over his father’s private enterprise, The International Temple of Music, located near the family’s entertainment theatre, the Trocadero. The venue originally featured classical performances and ensembles geared to a Victorian middle-class audience. Ziegfeld Sr. booked as entertainment for the World Fair the German-American Women’s Chorus, the German Liederkranz, and the Junger Männerchor, and sent his son to fi nd additional talent 21 “Billie Burke Weds,” in New York and Europe. Ziegfeld Jr. scoped the talent scene of his New York Times, April 13, 1914; John William World’s Fair competitors and opted for the more popular appeal of Leonard, ed., Woman’s vaudeville and variety acts. Who’s Who of America: A Biographical Dictionary of Contemporary Women of Ziegfeld thus began as a sort of scout or talent agent for his father’s the United States and entertainment house. Given a chance to draw larger crowds, Ziegfeld Jr. Canada, 1914–1915 (New York, 1914), 147. proved quite quickly that his entertainers could bring great revenue. His fi rst big success was the discovery of German muscle man, Eugene 22 “Daughter Is Born to ‘Bil- lie Burke’,” Boston Daily Sandow (1867-1925) in New York. Ziegfeld Jr. convinced Sandow to Globe, Oct. 24, 1916. change managers and they created an immensely popular show to 23 Richard Ziegfeld and Pau- 23 huge crowds of spectators awed by his strength. In 1893, he put the lette Ziegfeld, The Ziegfeld statuesque German model, a native of East Prussia (born Friedrich Touch: The Life and Times of Florenz Ziegfeld, Jr. (New Wilhelm Müller in Königsberg) on display for audiences, coaching York, 1993), 21–23.

HESTER | FLORENZ ZIEGFELD JR. 245 him to strike classical Greek and Roman poses designed to imitate up-market entertainment. According to Sandow, the theatre could hold six thousand spectators, and the house was sold out every night of his performance. He was of slightly over-average stature with a muscular physique of massive proportions, which appealed to the ladies who would pay extra to admire him in his dressing chamber.24

The two having hit it off , “Ziegfeld and Sandow enjoyed the food, the beer, the pretty girls, and the endless evenings in an atmosphere utterly and completely German.”25 Aft er a great success with the Chicago World’s Fair patrons, earning $30,000 (or $750,000 in 2010 dollars) within six weeks, the two took the show on the road, with Ziegfeld booking the strong man in major cities nationwide.26 Under Flo Ziegfeld’s management, Sandow’s frequent publicity stunt was to off er $10,000 ($250,000) to any member of the audience who could match his strength, naturally unrivaled, and the ﬁ nale of a performance was oft en Sandow lift ing a dumbbell-shaped pair of baskets, each containing an adult man. Though impressive, this was incomparable to the attraction to which crowds were drawn in San Francisco: a wrestling match between a mitted and muzzled lion and an unarmed Sandow. Aft er two years of these dazzling performances, Ziegfeld had earned a spectacularly impressive name for himself and a quarter of a million dollars (or $6,700,000 in 2010 dollars).27

Sandow was more than a popular circus act, however, and his success reveals much about Ziegfeld’s sensibility regarding audience desires at the time. Sandow’s act combined physical prowess with the reﬁ nement of classical art. His poses recalled those of Greek statues, but his near nudity was always an important part of his attractiveness 24 Ziegfeld and Ziegfeld, The Ziegfeld Touch, 21–23; Eugen to audiences. In a way, Ziegfeld began to learn how to sell “sex” to Sandow, Strength and How a Victorian era audience, pushing boundaries of the accepted yet to Obtain It (London, 1897), 130–138. legitimizing possible transgressions with references to classical style, artistic reﬁ nement, or European extravagance. 25 Higham, Ziegfeld, 15.

26 All ﬁ nancial comparisons are Ziegfeld looked repeatedly to Europe for new talent as his career made using the U.S. Purchasing progressed. Sandow parted ways with him aft er the national tour. The Power Calculator, available at http://www.measuringworth. two had tired of one another, Ziegfeld lost his performer, and, as was com/uscompare/. to be his habit throughout his career, he gambled away much of his

27 John Springhall, The Genesis fortune. In 1896 Ziegfeld found himself in New York in search of a of Mass Culture: Show new show and met comedian Charles E. Evans (1846-1945), whom he Business Live in America 1840 to 1940 (New York, 2008), convinced to revive his formerly popular and somewhat risqué play, A 159; Higham, Ziegfeld, 14–18; Parlor Match. Searching for a female lead, they immediately turned to Ziegfeld and Ziegfeld, The Ziegfeld Touch, 28. London where Ziegfeld would ﬁ nd “Parisian” performer Anna Held.

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Anna Held (1873?–1918), who was then approximately twenty-three years old, was the kind of European star Ziegfeld believed Broadway needed. She had begun her career at sixteen as a chorus girl and broke out as a multi-lingual soloist and actress in Paris and London. Persuaded perhaps by more than her talents, Ziegfeld foresaw great success for her so he named the terms: “$1,500 ($36,000) a week for ﬁ ve months in New York and on tour in A Parlor Match and $1,000 ($26,800) to bring her to America.”28 She could not turn down such an exuberant off er, considerably more appealing than her current salary. Held left her life in Europe — and her husband — and followed Ziegfeld to Broadway.

Ziegfeld touted Held’s sex appeal, telling the press and public that she bathed her beautiful skin daily in milk, inviting attention to her allure as an extravagant European lady.29 As one of his obituaries noted, one of Ziegfeld’s most habitual tactics, dating back to his promotion of Sandow, was that of “exhibiting something so nearly perfect that people were attracted by their own desire to admire.”30 Just like Sandow, Held became a new “product” for which Ziegfeld created high demand: “Anna Held’s identity as a European ‘lady’ was the key to marketing her as the secret of white sexuality and to marketing attractive female sexuality as white.”31

Anna Held was more than a commodity, to be sure, but had shaped her persona, originally developed in Paris, in her own way. She was a woman who boldly challenged Victorian era gender roles, riding horses astride and bicycles, and was one of the fi rst women to drive and own her own automobile. At the same time, she conveyed sophisticated European naughtiness and fl irtation — all of which Ziegfeld 28 “Anna Held Dies Aft er cleverly marketed. Thus, a Polish-born Jewish woman from Paris Gallant Fight for Life,” became an idealized fi gure to appeal to the tastes of a new, emerging Chicago Daily Tribune, Au- gust 13, 1918; Higham, American middle-class. Ziegfeld, 19–20, 23, 29.

As business developed, Ziegfeld time and again drew on European 29 Springhall, The Genesis of Mass Culture, 160; Louis elements in an eff ort to ﬁ nd a medium between the opera and the Pizzitola, Hearst Over Hol- playhouse and to combine the popular appeal of new commercial lywood: Power, Passion, and Propaganda in the Movies entertainment such as vaudeville or the nickelodeon with middle- (New York, 2002), 186. class respectability. His ventures embodied a desire to “elevate the 30 “Florenz Ziegfeld Dies In 32 ‘lowly’ Broadway chorus into the realm of upper-class gentility.” Hollywood.” Much like his father, Florenz Ziegfeld wanted to introduce Europe’s 31 Mizejewski, Ziegfeld Girl, musical culture to the United States, yet he did so in a very diff erent 55. way that drew on the more libertine aspects of the continent’s ﬁ n- 32 Springhall, The Genesis of de-siècle artistic life. His strategy was to package romantic, European Mass Culture, 159.

HESTER | FLORENZ ZIEGFELD JR. 247 appeal into innovative American stage productions. As late as 1904, the Washington Post reported that “Mr. Ziegfeld has gone to Europe, where he will keep his eyes open for any novelties that may add to the gayety of New Yorkers during the coming season.”33 Such nods to European culture — advertising Anna Held, a woman of Jewish and working-class origin, as the “star of Paris” — were ambiguous, however, as they did not imply traditional bourgeois high culture, but rather a more undeﬁ ned allure of metropolitan reﬁ nement. This amalgamation of cultural traditions had been key to his success since his business beginnings as a young talent scout, proving he himself possessed talent — and a well of multi-cultural knowledge from which to draw — that could refashion “European” artistry into an “American” commodity.

The defi nition of what exactly was “American” was by no means clear at the turn of the century and cultural entrepreneurs like Ziegfeld did their part in shaping popular defi nitions of the term: “During the period 1890–1920, the concept of Americanism was threatened less by foreign wars than by European immigration to this country,” and “new immigrants challenged the problem of what ‘an American’ could be and what this American looked like.”34 Ziegfeld, himself of immigrant background, on the one hand imported European talent and borrowed from European entertainment models such as the Folies Bergère, the Parisian musical show. On the other hand he catered to a middle-class audience that was highly sensitive to “foreign” infl uences in various aspects of society. The result, as in other areas of the growing commercial entertainment industry of the early twentieth century, was a product designed to appeal to both “old-stock” and “new” Americans.

33 “Florenz Ziegfeld Joins Ziegfeld was regularly producing popular Broadway shows in New Weber,” Washington Post, July 3, 1904. York by the early 1900s, the most famous of which were his Follies, discussed in more detail below. The show illustrates how “the 34 Mizejewski, Ziegfeld Girl, 115. Ziegfeld aesthetic evolved concurrently with American political 35 Jennifer L. Bishop, “Working and cultural superiority.”35 An example of this was Ziegfeld’s an- Women and Dance in Progres- sive Era New York City,” M.A. nouncement in 1924 of his new interest in American realism in the thesis (Tallahassee, 2003), 76. arts — productions to fi nd the humor in familiar Americanisms, 36 36 “Ziegfeld Now to Glorify Na- the “genus Americanus.” From then until his fi nal year, Ziegfeld tive American Humor,” New maintained that whatever the defi nition of beauty would be, he York Times, Dec. 7, 1924. would glorify it, declaring “American women are the most beautiful 37 “What Makes a Woman Beau- in the world”; and whatever the defi nition of American was, he would tiful?” Washington Post, Feb. 21, 1932. promote it through his productions.37 Ziegfeld, once the importer of

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foreign talent, developed a new, truly “American” enterprise — an institution glorifying the “American” girl, with Ziegfeld as the great gloriﬁ er — and projected an image of exactly what the American looked like — standardizing beauty and branding it a dominantly American good.38 In this, perhaps, his success mirrors the success of American commercial entertainment more broadly which thrived through a vibrant transnational culture with its ability to fuse aspects of diff erent cultures into standardized products with a broad appeal, cutting across ethnic and class boundaries.

Business Development The “American” legend, the so-called great Ziegfeld of Broadway, was making headway in Broadway business by the turn of the century as a self-made theatre impresario. Show business was already highly specialized, as were most of the smaller fi rms in the pre-World War I period. Ziegfeld’s fi rms were fi nanced with his own money and venture capital off ered by private investors, frequently other Broadway producers. He, himself, was the driving force of business; his shows were not shaped and directed by growing bureaucracies as in many other industries at the time. He focused on one particular branch, though he later did experiment with the new media of radio and fi lms to reach broader audiences — and customers. While, in most of the big trusts of the era, managers represented the abstract and rational tone of effi cient business, Ziegfeld was still able to contribute a highly personal note, the Ziegfeld touch. His relations to his employees remained personal and he shared close, even intimate, relationships with his stars, paying salaries that raised new standards for the cultural industry.

38 “Florenz Ziegfeld Dies in In 1898 Ziegfeld was named co-proprietor, along with William A. Hollywood”; Mizejewski, Brady (1863-1950), “prize ﬁ ght promoter and theatrical hustler,” of the Ziegfeld Girl, 116.

Manhattan Theatre. However, because of bickering, partially over the 39 “Theatrical Gossip,” New booking of Held, the two parted ways in 1901.39 When he partnered York Times, Jan. 26, 1898; quotation from “Theatrical with Joseph “Joe” Weber (1867-1942) in 1904 to present burlesque Gossip,” New York Times, performances, Held was named as a main attraction.40 The image April 8, 1901. of feminine desirability was being sold as innocence and a touch of 40 “Florenz Ziegfeld Joins European misbehaving intrigue. Held’s draw was that of a Parisian Weber,” The Washington Post, July 3, 1904; “Zieg- with misbehaving eyes, a sweet singing voice with a French accent, feld Joins Weber: Partner- and overt sex appeal.41 One article declared: ship Formed to Continue Broadway Music Hall,” New York Times, June 21, Mr. Florenz Ziegfeld, Jr., is to be congratulated for his ex- 1904. cellent judgment. In his latest off ering to Washington, ‘The 41 Mordden, Ziegfeld, 42–44.

HESTER | FLORENZ ZIEGFELD JR. 249 Parisian Model,’ he has gone as near the limit of indecency as a theatrical manager can go, without precipitating police intervention. Which means, of course, that the entertainment at the National Theater this week will play to capacity business. The artistic mélange, which serves to exploit the talents of Anna Held, is chieﬂ y remarkable for its novel schemes to display the female form only more or less adorned.42

As audiences responded, Ziegfeld’s female forms became less and less adorned. The Chicago Daily Tribune reported: “It is burlesque of the better class, and the female form adorned with as scant covering as the law allows is one of its features.”43 In 1906, Ziegfeld joined the Theatrical Syndicate and, in 1907, introduced his ﬁ rst of the Ziegfeld Follies with the help of Abraham Erlanger (1859-1930), who paid him $200 ($5,000 in 2010 dollars) weekly. The production, whose name suggested a debt to the Parisian shows of the Folies Bergère, was a vaudeville-style show, with actors, comedians, singers, dancers, and, of course, chorus girls providing aesthetically spectacular entertainment. It required a $16,800 ($400,000) investment and returned a proﬁ t of $120,000 ($3,000,000).44

The Follies were Ziegfeld’s most signifi cant production, running from 1907 until his fi nal year, 1932. The Follies most clearly presented his ideal type of the “Ziegfeld Girl” whose appeal went beyond respectable nudity, but had aspirational qualities as well. The Ziegfeld Girls were supposedly characterized by grace and beauty in face, form, and manners, but also possessed talent and an industrious work ethic. 42 F. P. Morse, “National — Anna Held in ‘The Parisian Model,’” They were “busy as bees” and striving for perfection, but they could Washington Post, Dec. 3, 1907. come from all rungs of the social ladder — whether socialite or school 45 43 W. L. Hubbard, “News of the teacher, stenographer or waitress, everyone could be a Ziegfeld girl. Theaters,” Chicago Daily Tribu- From its beginnings, the Follies was innovative entertainment, the ne, Nov. 23, 1908. fi rst Broadway production to present nudity. Yet, Ziegfeld managed to 44 Anthony Bianco, Ghosts of recreate the image of the chorus girl as one deserving of appreciation 42nd Street: A History of America’s Most Infamous Block and respect. “The chorus girls, as a class, are just as good as girls in (New York, 2004), 68. any other occupation I know. Seventy-fi ve per cent of the girls who

45 Florence Ziegfeld, “What begin in that humble vocation — girls who are the singing, dancing Makes A ‘Ziegfeld Girl,’” New background of an opera or a musical comedy — are good girls. . . . York Morning Telegraph, 1925. Her looks plus her intelligence are her capital.”46 46 Florenz Ziegfeld Jr., “The Truth About the Chorus Girl,” The image of naughtiness as respectable art gave his shows a broader Washington Post, Sep. 10, 1916. appeal. Ziegfeld did not just intend to draw men to gawk at girls, but

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both men and women from all social spheres to appreciate form, and he did so by gracefully introducing the display of nudity, and even the persona of the chorus girl herself, as glamorous art. Presenting the Follies ladies as works of art, Ziegfeld found a loophole in New York law that allowed the exhibition of nude art so long as the subjects of art were still, creating a business strategy that was widely reproduced and proved wildly popular among the middle class masses and wealthy elite alike.47 With this, he drew on ideas from the Le- bensreform movement and the Art Nouveau style, both prominent in Europe from the late 1890s. However, he utilized and commercialized these ideas in a particularly American fashion: “Ziegfeld glamorized the chorus girl and made her a symbol of the modern, independent woman. Her status, as well as her salary, increased, and she even became a suitable mate for the wealthy.”48

Much like Hollywood by the 1920s, Ziegfeld created glamorous stars that could defy and contradict the gender norms of their time, inspir- ing emulation and adoration at the same time. Pushing the allure of the Follies beauty, the sex appeal of his wife and main star Anna Held remained key to exploiting the market during his ﬁ rst years. Even aft er he and Held separated, Ziegfeld remained the authority in marketing, and even deﬁ ning, attractive as well as humorous femininity. From the beginning he used images and started advertisement campaigns to promote his shows — learning from circus guru P. T. Barnum’s example of employing promotional hype and extravagant stunts, but avoiding all disgrace. Ziegfeld also became a celebrity himself.

Newspaper publisher William Randolph Hearst (1863-1951) played no small role in Ziegfeld’s success. “Hearst was more than a ﬁ nancial 47 Bianco, Ghosts of 42nd supporter and friend to Broadway’s famous impresario: if Ziegfeld can Street, 68; Stephen M. Vallillo, “Broadway Re- be credited with ‘Glorifying the American Girl,’ then Hearst deserves vues in the Teens and credit for glorifying Ziegfeld’s Follies . . . The Hearst press was Twenties: Smut and Slime?” The Drama Re- “unquestionably the chief publicist for the Follies throughout their view 25:1 (1981): 25–34, lifetime.”49 From the outset, Ziegfeld’s stunts and Held’s appeal had here 25. helped the publisher sell papers. Critics, meanwhile, lauded Ziegfeld 48 Ziegfeld and Ziegfeld, The for the artistic qualities of his shows. Already gaining acclaim for his Ziegfeld Touch, 179. work, he was praised in that while the technical aspects of his shows 49 Pizzitola, Hearst Over Hol- were comparable to those put on by competitors and imitators such lywood, 186. as John Murray Anderson, “the touch of Ziegfeld is the touch of an 50 George Jean Nathan, The artist, whereas the touch of such a man as Anderson is the touch of Theatre: The Drama; The Girls (New York, 1921), a showman.”50 Most critical to his success, however, was that the 145.

HESTER | FLORENZ ZIEGFELD JR. 251 theatre, or better, Ziegfeld’s productions managed to succeed on two fronts. First, they never failed to adapt and keep up with changing times: with the elections of 1908, the Follies of that year had “more or less to do with the candidates,” poking particular fun at Taft ; second, they consistently outdid themselves, making each show better than the previous one.51 When the burlesque show returned to New York in 1912, on the roof of the newly purchased New York Theatre — renamed the Moulin Rouge to reinforce, again, its Euro- pean appeal — it was reported of the Follies that “the chorus wears less and the comedians fall harder.”52

By 1913, the Follies had become too large, both fi guratively and literally, for its venue and made its fi rst debut in the New Amsterdam theatre, “signaling its arrival as a big-time Broadway Franchise,” and giving rise to Ziegfeld Follies Inc.53 The Midnight Frolic, a midnight cabaret performance, was introduced in 1914, opening on the rooft op of the New Amsterdam, and the following year’s review of the show described it as featuring “ravishing orgies of color,” “stunningly gowned girls,” and comedian Will Rogers (1879-1935), one of many stars produced and promoted by Ziegfeld in the following decades.54 Broadway shows like the Follies had increasingly become big business as the New York theatre industry grew during the fi rst decades of the twentieth century through imported continental popular op- erettas and vaudeville shows. 51 Hubbard, “News of the Theaters.” Excess was indispensable to such productions, but in 1915, Ziegfeld 52 Burns Mantle, “‘Follies’ 1912 apologized for one invention for which he could not give any excuse — Series Returns to Burlesque,” the Show Girl, who, he agreed with critics, was of no other use than Chicago Daily Tribune, Oct. 27, 1912; quotation from “Week’s as decorative art to set the stage. The Show Girl, unlike the Chorus Plays On Broadway,” Washing- ton Post, Jan. 28, 1912. Girl who sang and danced, possessed no talent and contributed nothing other than presence to the performances.55 “I felt that the time 53 Bianco, Ghosts of 42nd Street, 68. had come for a novelty, and I was convinced that my new Show Girl was the innovation to fi ll the bill. . . . The Show Girl, like that other 54 “‘Midnight Frolic’ Again,” New York Times, August 24, 1915. well-known bird, the dodo, is extinct. The new 1915 model is not a show girl — ’she fi lls space’ of course, but she can also sing, dance 55 “What Earthly Use Is A Show 56 Girl?” Washington Post, March and talk . . . .” 21, 1915. And, the “new” show girl could ride a bicycle as well. Theater his- 56 Florenz Ziegfeld Jr., “Ziegfeld Tells Why He Did It,” torian Rachel Shteir asserts “Ziegfeld also used the language of suf- Washington Post, March 21, fragism to lure in audiences. He capitalized on the appeal of bicycling 1915. [. . . which] by the turn of the century had become an acceptable fad 57 Rachel Shteir, Striptease: The for women. When Ziegfeld allowed his young wife to ride a bicycle, Untold History of the Girlie Show (New York, 2004), 50. it projected a healthful modernity and a girlish hint of suff ragism.”57

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In 1915, Ziegfeld argued, “I have tried at least a hundred suff ragist scenes on the stage and never got a laugh or an eff ect out of any of them. The women don’t like to see this subject ridiculed and they don’t like to see it treated seriously. The subject is a bad one for theatrical purposes;”58 but it seems that Ziegfeld found a way, projecting the image of a woman of — or slightly ahead of — her time, whatever the audience desired that to be.

Inevitably, the Ziegfeld productions were contextualized comedies that had to confront many social issues of the early twentieth century, such as the suff ragist movement. While he may have at times challenged existing gender norms, he did not escape the prevailing racism and Jim Crow comedy of his time. Before his production of Show Boat much later in his life, Ziegfeld was, in his early years, at best defensive of individual black performers who adhered to desirable racial norms. Of Bert Williams (1874-1922), his performer in 1915, Ziegfeld said, “Williams is black but he’s the whitest man I’ve ever had any dealings with. I gave him his ﬁ rst opportunity for playing outside of a colored show and have had him with me now for some years. . . . Williams’ color doesn’t seem to count against him with the public,” but noted that he was not included in tours in the South.59 Ziegfeld was an opportunist, proﬁ ting from the racist humor popular at the time, presenting coon shouting, trick puppetry, and blackface skits of song and dance.60

In the end, it was the bottom line that concerned Ziegfeld more than social issues. His entertainment business was highly dependent not 58 Florenz Ziegfeld Jr., “The Gambol of the Follies,” only on ticket sales but also on bar and restaurant sales. Therefore, Chicago Daily Tribune, Feb. Prohibition aff ected Ziegfeld’s business. The performances, for better 14, 1915. or worse, were in demand and things were going well when, in 1916, 59 Ibid. Ziegfeld and Charles Dillingham (1868-1934) became co-managers of 61 60 Mizejewski, Ziegfeld Girl, the Century Theatre, featuring “dancing on the roof between acts.” 57–58. Liquor sales were responsible for a good deal of the rooft op revenue, 61 “Dillingham Gets Century so when a local court enforcing the encroaching liquor laws that pre- Theatre,” New York Times, ceded Prohibition prohibited liquor sales at the theater, Ziegfeld had May 6, 1916. to ﬁ nd a way around the rule, and applied for a separate liquor license 62 “Forbids Liquor Sale At exclusively for the roof top.62 Despite such roadblocks, Ziegfeld’s Century Theatre,” New York Times, May 31, 1917. business thrived. The Chicago Daily Tribune reported, stressing the success of the show, seats for the Midnight Frolic were being sold for 63 “Activities of the Gotham Thespians,” Chicago Daily $3 ($50) each, and by speculators for up to $5 ($85). For the Follies Tribune, Oct. 15, 1916; of 1917, ticket prices had generally risen to $5 ($85), a sign of great “Between Seasons,” New York Times, June 17, success for Ziegfeld as his shows were expensive pleasures.63 1917.

HESTER | FLORENZ ZIEGFELD JR. 253 Aft er the American entrance into World War I, however, the theatrical scene changed: Just shy of a month aft er entry, Ziegfeld hit the news, hosting, with fellow managers, a beneﬁ t of the Patriotic League of the United States Marine Corps Recruiting Service.64 The producer was not aff ected by anti-German-American sentiment and backed the U.S. war eff orts. In the summer of 1917, plans were announced for Red Cross Theatrical Day by which the proceeds for a day’s performances were to be donated in entirety to the Red Cross; this eff ort was, however, postponed due to an unpaid war loan, having pledged over one and one-half million dollars in war bonds.65 In 1919, he donated his performers for the cause of blinded soldiers, a ball held at the Ritz- Carlton for the Permanent Blind Relief War Fund.66

Shortly before America’s entrance into the war, Ziegfeld had announced his intention to produce more dramas, off ering more serious performances to an expectedly more somber public: “I intend to produce every play that appeals to me as desirable of public interest.”67 Yet, many of his wartime shows were lighter fare, featuring stars like 64 “Beneﬁ t for U.S. Marine Will Rogers (1879-1935), Lillian Lorraine (1892-1955), and comic Lew Corps,” New York Times, May 1, 1917. Fields (1867-1941). His wife, Billie Burke, headlined the 1917 comedy Rescuing Angel, while war-themed shows such as the 1918 By Pigeon 65 “Theaters Plan to Give One Day to Red Cross,” Chicago Post did poorly. Public interest alone did not suffi ce either, because Daily Tribune, July 1, 1917; throughout the war and immediately following it, theater shows’ “Theater Day for Red Cross Aid Delayed by Loan,” ticket sales suff ered. Theater ticket sales were also hit with a war Chicago Daily Tribune, Oct. 17, tax. When the tax was to be raised from ten percent to twenty per- 1917; “Stage Money for War Loan,” Washington Post, Oct. cent, Ziegfeld sent a cablegram protesting the increase to President 14, 1917. Woodrow Wilson and noted the contributions the entertainment 66 “Ball for Blinded Heroes,” New business had made to the war eff ort.68 In 1920, notwithstanding York Times, Feb. 16, 1919. his desire to cater to public demand, Ziegfeld reported a noticeable 67 “Ziegfeld to Produce Dra- “slump” in sales, particularly while touring.69 mas,” New York Times, Feb. 22, 1917; Quotation from “Ziegfeld Yields to Drama’s The postwar recession hit his business hard. On top of this crisis, Lure,” Washington Post, Feb. Ziegfeld had been dealt several business blows, among them the 25, 1917. defection of one of his main performers, comedian Eddie Cantor 68 “Send Theatre Tax Appeal to (1892-1964). The independence of stars could aff ect producers as Wilson,” New York Times, Jan. 18, 1919. well, the negative side of Ziegfeld’s business model. In demanding Cantor’s “exclusive services,” he lost management of the performer 69 “Theatrical Slump Marked on 70 the Road,” New York Times, altogether. Cantor was not alone in his displeasure with contract Oct. 18, 1920. terms; unions also restricted Ziegfeld’s control of his entertainers. 70 “Eddie Cantor Has Row with The Actors’ Equity Association began a strike in 1919, and Ziegfeld Ziegfeld and Quits Follies,” attempted to prepare himself: “On August 11, four days into the Chicago Daily Tribune, Sep. 2, 1920. strike, Florenz Ziegfeld obtained an injunction restraining the AEA

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from interfering with his shows at the New Amsterdam theatre and another order prohibiting individual cast members from striking.”71 The Producing Managers’ Association warned actors not to break their contracts through the strike and contended that the Actors’ Equity Association would be held responsible for any losses to the producers, but the actors had salary grievances. Chorus girls argued that they should be paid additional money for performances above and beyond the number originally agreed on and scheduled; Zieg- feld argued that because he paid much higher salaries than those demanded in the agreement between the Producing Managers’ and Actors’ Equity Associations, he was not required to pay the chorus girls for additional performances.72 In December of 1921, he blamed 71 Sean P. Holmes, “All the high costs and the Actors’ Equity Association for driving him to a World’s a Stage! The Ac- decision to abandon the production industry in the United States, tors’ Strike of 1919,” Jour- nal of American History suggesting he would buy a professional football team and threatening 91.4 (2005): 1291–1317, to emigrate to London and take his star and wife Billie Burke with here 1312. him: “I put $200,000 ($2,440,000) into a production and then the 72 “The Producing Managers’ Equity tries to tell me how to run it. Not me!”73 Association,” display ad, New York Times, August 12, 1919; “‘The Claw’ Prohibition laws similarly infuriated Ziegfeld as an infringement on Approaches News his freedoms and profi ts. He announced the closing of the Midnight of the Theaters,” Chicago Daily Tribune, Frolic out of principle, proclaiming a loss of liberty in the country. Yet, Jan. 20, 1922. no more than two months later, he reversed this decision, announcing 73 “Ziegfeld to Quit Produc- the reopening of his theater with the installation of a soda fountain ing Shows,” Washing- and giving credit to the restrictions placed on authorities that pre- ton Post, Dec. 17, 1921; “Ziegfeld to Quit Here for vented them from conducting unwarranted searches.74 Considering London,” New York Times, that in 1928 Ziegfeld was held at the Plattsburg, New York post on Dec. 27, 1921. the Canadian border and fi ned for transporting “106 bottles of liquor 74 “London Is to Have the Midnight Frolic,” New and forty-two bottles of Canadian ale,” one can only speculate as to York Times, May 19, 1921; how much the producer suff ered from Prohibition.75 “‘Midnight Frolic’ Again,”; “Notes About the Players,” Boston Daily Globe, July Simultaneously, Ziegfeld’s business model was aff ected by expensive 3, 1921. lawsuits with fi nanciers and business partners. At the beginning of 75 “Ziegfeld and Two Other the century Broadway producer Marc Klaw (1858-1936) and his long- Fined at Border for Alleged time partner Abraham Erlanger were at the core of the Broadway Importation of Canadian Liquor,” New York Times, “trust” of producers. By the late 1910s, however, angered by business Sep. 13, 1928. losses, Klaw sued both Erlanger and Ziegfeld. The partners had a 76 “A New Theatrical Alli- longstanding business relationship with Ziegfeld, but Klaw now ance,” Washington Post, charged “waste of corporation assets” and stated Ziegfeld’s salary August 4, 1918; Bianco, Ghosts of 42nd Street, 68; 76 of $22,500 ($293,000) per year was “exorbitant.” In court fi lings, quotations from “Klaw Klaw accused his former partners of “trying to squeeze him out and Again Sues Former Part- ners,” New York Times, acquire his fourth interest in both corporations for almost nothing,” June 20, 1922.

HESTER | FLORENZ ZIEGFELD JR. 255 demanding they present the books in court showing the misap- propriation of funds.77 Ziegfeld was protective of his right to proﬁ t, however, and, in 1923, went so far as to step out of the Producing Managers’ Association with intentions of creating a new organization representing the rights of only producers against the Actors’ Equity Association.78

Despite such problems, the Follies continued year aft er year and in new venues, thanks to a deal Ziegfeld struck with William Randolph Hearst and Arthur Brisbane (1864-1936), a wealthy New York editor and journalist, who — while simultaneously building up Ziegfeld’s estate — constructed a theater to be named the Ziegfeld in New York City, which Ziegfeld was to lease exclusively for his productions. This deal allowed him to bypass the theatre owners who had obtained large profi ts from his shows — profi ts that Ziegfeld would now keep for himself.79 The New York theatre eventually opened in 1927. With this idea in mind for his on-tour performances as well, Ziegfeld expanded the plans for his profi table venture, undertaking, on his own, the $1,000,000 ($12,400,000 in 2010 dollars) construction of the Ziegfeld theatre in Chicago.80

Ziegfeld’s postwar slump deﬁ nitively ended in May 1922, when he outdid himself once again with his production Sally, catering to the demands of the times, which returned to recovery, increasing wealth, and eventually extravagance in the Roaring Twenties for which his Ziegfeld Girls became symbols. His production of Sally was — to 77 “Klaw Asks Audit of ‘Frolic’ the outrage of his competitors — exuberantly costly and his great- Books,” New York Times, Dec. est success yet, making him a millionaire. Sally was a satirical show 7, 1920. about a dishwasher (named Sally) who rises to stardom as a show 78 “Ziegfeld Hastens His Resig- 81 nation,” New York Times, July girl, a Ziegfeld Girl. In a self-referential way, the show advanced 16, 1923. Ziegfeld’s claim that his show girls were the epitome of the self-

79 “Hearst and Ziegfeld in Big made and modern New Woman of the 1920s. When the main star Theatre Deal,” New York of the production, Marilyn Miller (1898-1936), announced that she Times, Jan. 6, 1925. would marry, Ziegfeld quickly attempted to stop her (albeit unsuc- 80 “Ziegfeld to Have Chicago cessfully). Quoting three million dollars in potentially lost ticket Theatre,” New York Times, Oct. 17, 1925. sales and a proﬁ t of two hundred-thirty thousand dollars each for himself and his star, he argued a marriage “would injure her value as 81 “Inside Facts About ‘Sally’,” 82 Boston Daily Globe, May 21, a star.” 1922; Ziegfeld and Ziegfeld, The Ziegfeld Touch, 98. Financial ups-and-downs did not to deter Ziegfeld from his day-to- 82 “Marilyn, Wed, May Lose day duty of reinventing the commodity of consumer desire. He had Stage Value — Ziegfeld,” to keep up with the fashions of the times and change his promotions Chicago Daily Tribune, July 15, 1922. as quickly as ladies’ style. Believing the thin-appearing, bob-haired,

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pale, face-painted fl apper of early 1920s vogue to be on her way out, Ziegfeld explained — from head to toe — what now constitutes a naturally beautiful woman — the plump girl, the “perfect beauty”: “That’s the kind the great American public — your tired business man, your matron and maid — want, and that’s the kind I comb the beauty market to fi nd, and that, I hope, is what I will always be able to present in the Ziegfeld Follies.”83 Whether as modern fl apper or natural beauty, becoming a Ziegfeld girl remained desirable for many women in show business during the 1920s — and oft en a step towards a successful career as in the cases of Dolores Costello (1903- 1979), Paulette Goddard (1910-1990), Barbara Stanwyck (1907-1990), and many others.

Ziegfeld did respond to the more conservative strains of 1920s culture which famously resulted in new, more “Puritan” guidelines for both stage productions and Hollywood movies. In 1927 the New York legislature enacted the Wales Stage Regulation Bill which tightened moral censorship of theatre productions. Shortly prior, in June of 1926, Ziegfeld introduced a major shift in marketing strategy, cutting back on nudity, when he “issued a statement asking the press and the theatre-going public to support only shows that are free from broad dialogue and indecent displays,” accusing competitors of attempt- 83 “Predicts the Return of 84 ing to draw crowds by “pandering to the vilest tastes of playgoers”; the Plumper Girl,” New additionally, he asserted: “Nudity cannot remain a heritage of the York Times, July 21, 1926; quotation from “Flappers American theatre because communities everywhere are rising against Flying Fast Before Natu- this orgy of dirt.”85 The law initially allowing him to display nude ral Girl,” Washington Post, Nov. 18, 1923. women as still artwork held the implicit moral code which became 84 “Ziegfeld Fights Nudity on a point of contention between Ziegfeld and other producers, namely Stage,” New York Times, Lee Shubert (1871-1953). Ziegfeld found the parading of nude women June 26, 1926. vulgar and both legally and morally unacceptable, while Shubert 85 “Ziegfeld Proposes felt that ladies in the nude — even animated — were comparable Sumner as Censor,” New York Times, June 29, to sculpture, thus never vulgar, understanding the public display as 1926. tactic.86 Ziegfeld, himself, referred to this as a movement “back from 86 Angela J. Latham, “The nudity to artistry,” but while John S. Sumner (1876-1971), Secretary of Right to Bare: Containing the New York Society for the Suppression of Vice, backed Ziegfeld’s and Encoding American Women in Popular Enter- 87 change, even he suspected it was a “commercialization of virtue.” tainments of the 1920s,” Such moral outrage certainly stood in contrast to Ziegfeld’s own ear- Theatre Journal 49:4 (1997): 455–73, here 472; lier work and was likely as much motivated as much by an attempt “Shubert Defends Nudity,” to hamper the competition as it was an expression of concern about New York Times, June 29, 1926. artistic integrity and respect for women. Perhaps most perplexing was Ziegfeld’s statement — in denouncing most beauty contestants as 87 “The Triumph of the Skirt,” New York Times, women devoid of talent — that “Intelligence, personality and a nice June 28, 1926.

HESTER | FLORENZ ZIEGFELD JR. 257 sense of values are usually lacking in the girl who publicly parades her ﬁ gure before a multitude of strangers.”88

Had that not described his Follies beauties? Around the same time, indeed, in 1928, Ziegfeld declared that he was hardly proﬁ ting from the Follies productions and was considering their end.89 Whoopee, featuring Eddie Cantor, “was Broadway’s top grossing musical throughout the 1928-29 season, with weekly ticket sales averaging in excess of $40,000 ($509,000).”90

Ziegfeld was indeed an exceedingly wealthy man, and aft er encouragement from his attorney he invested more than two million dollars ($25,500,000 in 2010 dollars) in the stock market. But while Ziegfeld was in the courtroom over a small legal dispute, on October 29, 1929, he was unknowingly wiped out.91 The stock market crash left him bankrupt and momentarily devastated, but it was not long until the anxious Ziegfeld was producing Smiles, Hot Cha — which was ﬁ - nanced by a second-generation German-Jewish immigrant, New York

88 Isabel Stephen, “Why gangster Arthur Flegenheimer (1902-1935), better known as Dutch Ziegfeld Opposes Beauty Schultz — and his last Follies. Despite presenting the likes of Fred Contests,” Washington Post, July 22, 1928. Astaire (1899-1987), these attempts to regain his hold on Broadway were unsuccessful.92 It was during this period of economic despair 89 “Ziegfeld May End ‘Follies,’” New York Times, Feb. 23, that Ziegfeld once again addressed an American president, now 1928. Herbert Hoover, over the “unwarranted” theatre tax, taking particular 93 90 Henry Jenkins III, “‘Shall We issue with the fact that cinema tickets did not have this tax burden. Make It for New York or for Distribution?’: Eddie Can- The motion pictures were a particular sore point with the Broadway tor, ‘Whoopee’, and Regional Resistance to the Talkies,” man. Yet once again, Ziegfeld was able to anticipate a trend. In the Cinema Journal 29.3 (1990): 32–52, 33. year before the crash, Ziegfeld had brought suit against Universal Pictures, the motion picture studio corporation (led by German im- 91 Higham, Ziegfeld, 177, 201– 202. migrant Carl Laemmle (1867-1939)), over the rights to transform Show Boat, a dramatization based on Edna Ferber’s novel, into a motion 92 Will Rogers and Arthur Frank 94 Wertheim, Will Rogers at picture show. “At one point Ziegfeld launched a pugnacious ad cam- the Ziegfeld Follies (Norman, paign against cinema, emphasizing the value of physical presence. . . . 1992), 225; Rob White and Edward Buscombe, British But aft er his serious losses in the market crash of 1929, Ziegfeld went Film Institute Film Classics, to Hollywood, entered a partnership with Samuel Goldwyn, and in a Vol. 1 (London, 2003), 200. number of press releases explained his plans to fi lm a series of mu- 93 “Asks Hoover’s Aid in Repeal- sical revues.”95 Ziegfeld took the opportunity to explore new media ing Tax,” New York Times, Dec. 8, 1929. opportunities. He eased critics into the idea of a fusion of Broadway theatre and fi lm, explaining in March 1929 that he could use fi lm to 94 “Talking Movie Plays,” Washington Post, May 20, expose a previously untouched market to the theater. In his opinion, 1928. there could be no replacement for the real theater experience, and 95 Mizejewski, Ziegfeld Girl, 147. he claimed to be unconcerned that this relatively new media would

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dominate or extinguish his own.96 Still, Ziegfeld and other Broadway producers could not ignore the fact that throughout the interwar years, cinema and the radio increasingly encroached on their claims that they set the standards for popular mass entertainment.

On June 14, 1929, it was announced that Ziegfeld had formed a partnership with Polish-Russian immigrant Samuel Goldwyn (1879-1974) to create “a new company which will turn out shows for the audible fi lms,” the fi rst venture of its kind, once again making Ziegfeld a pioneer in marketing innovative products.97 In a 1929 interview, Goldwyn described the new partnership of fi lm and theatre as momentous, while Ziegfeld justifi ed his decision as realizing an opportunity to reach a wider audience.98 Following Showboat, several Ziegfeld stage productions became Hollywood movies, including Sally, Rio Rita (both 1929) and — with the most direct artistic impact from Ziegfeld himself — Whoopee! (1930).

Of even greater inﬂ uence, perhaps, was his utilization of radio media. “The Follies of the Air,” with discreet commercialism, featured, among other stars, Will Rogers, Billie Burke, and Ziegfeld himself. 96 “Ziegfeld ‘Not Worried,’” New York Times, March A New York Times reporter praised the producer: “Ziegfeld has con- 25, 1929. tributed something to the art of broadcasting. The broadcasters say 97 “Ziegfeld to Join ‘we do not know just what it is.’ They will probably discover it is tal- Goldwyn In Talkies,” ent and showmanship.”99 As unemployment was rampant, Ziegfeld New York Times, June 14, 1929. See also Mizejew- gave opportune airtime to idle actors and actresses, taking part in the ski, Ziegfeld Girl, 147. 1932 broadcast of the Philharmonic Beneﬁ t Concert for Unemployed 98 “The Theatre,” Wall Street Musicians.100 Journal, June 15, 1929.

99 Orrin E. Dunlap Jr., As far-fetched as it may seem, Ziegfeld’s touch of creativity was “Listening-In,” New York employed even further from the stage when, in 1932, he branded his Times, April 24, 1932. own designs for three of the Scranton Railways Co.’s trolley cars, each 100 “The Microphone Will bearing a self-promoting advertisement of his name as designer.101 Present,” New York Times, April 24, 1932. Ziegfeld gave the cars a touch of “color” and added dark ivory to the exterior.102 As much as he marketed himself, however, Ziegfeld 101 “Trolley Cars ‘By Ziegfeld,’” Wall Street was never able to regain his fortune; and he ran into critics willing Journal, June 7, 1932. to remind him of his misfortune. When Ziegfeld publicly accosted 102 “Ziegfeld Partial to Ivory opera producer Arthur Hammerstein (1872-1955) for his intention Trolley,” Pittsburgh Press, to use mechanical music as opposed to an orchestra in the theatre, June 5, 1932.

Hammerstein ﬁ red back: “Mr. Ziegfeld’s attitude is that of a man who 103 “Ziegfeld Attacks owns a peanut stand which for years has been paying a good revenue Hammerstein’s Plan,” New York Times, April and who objects most strenuously to the removal of the peanut stand 4, 1929; quotation from and its displacement by a skyscraper that will make millions in values “Defense by Hammer- stein,” New York Times, and in revenues.”103 April 5, 1929.

HESTER | FLORENZ ZIEGFELD JR. 259 Yet Hammerstein’s portrayal of Ziegfeld as a peanut hawker did not accurately convey Ziegfeld’s reputation: “In the midst of personal bankruptcy proceedings, Ziegfeld was still respected enough to raise capital for what proved to be his theatrical swan-song — the ﬁ rst Broadway revival of Show Boat (on May 19, 1932). By Depression standards the revival was a hit.”104 Florenz Ziegfeld never ﬁ nancially recovered from his stock market losses, but he remained a legendary success.

Social Status and Personality Florence Ziegfeld’s personality complemented his colorful and exuberant stage productions. The famous cowboy comedian and movie star Will Rogers, his lifelong friend, credited Ziegfeld with having far more to do with the circus-of-entertainment’s success than the performers.105 He was known for favoring expensive clothing and for keeping a fresh ﬂ ower in his lapel. Burkely Crest, an estate north of New York City owned by Billie Burke, became an outlet for Ziegfeld’s extravagant spending, with a menagerie of animals — including buf- falos and lion cubs — kept on the grounds and a child-scale model of Mount Vernon installed as a playhouse for his daughter.106 Ziegfeld also loved gambling at Monte Carlo.107

Ziegfeld gambled not only his fortune. Taking high risks with hopes of high returns on investment was, more oft en than not, worth the 104 John Bush Jones, Our Mu- gamble in his business as well. A risk-taker both in business and sicals, Ourselves: A Social History of the American Mu- at home, he oft en blurred the line between the two: “Mr. Ziegfeld sical Theatre (Lebanon, NH, is a good manager. But as a husband — O, he can think of nothing 2003), 82. but business, business, business!” Anna Held exclaimed in a 1914 105 Rogers and Wertheim, Will Rogers at the Ziegfeld Follies, interview. “When I leave the theater and go home, it is the theater 227–29. he talks of — always the theater. One wants a husband who can 108 106 Grant Hayter-Menzies, talk something besides business to his wife.” In 1910, while Held Mrs. Ziegfeld: The Public and took a one-year leave of absence from the stage, Florenz took ﬂ ying Private Lives of Billie Burke (Jeff erson, NC, 2009), 92–93. lessons, bought a small “Antoinette monoplane,” and suggested he would enter amateur ﬂ ying competitions.109 107 Rogers and Wertheim, Will Rogers at the Ziegfeld Fol- lies, 225. Ziegfeld was also known to commit a few follies of his own. He was in love with Lillian Lorraine, intimate with Olive Thomas (1894-1920), 108 “Miss Anna Held Talks of Ex-Husband’s Marriage,” and involved, to say the least, with Marilyn Miller. In 1922, when Chicago Daily Tribune, April rumors of indiscretions with Miller were circulating nationwide, 14, 1914. Billie Burke announced that she did not consider divorce an option 109 “Anna Held Is Resting,” Los and even attempted to dispel the rumors by publicly daring Miller Angeles Times, August 24, 1910. to come clean — and to admit that Ziegfeld’s discouragement of her

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marriage plans had been a matter of business, not love.110 Despite his shortcomings, he was passionate about his career, his wife, and particularly his daughter. He was also compassionate towards his ex-wife, Anna Held, during her fi nal months as she suff ered from illness, staging a private show for her to lift her spirits. He also funded charitable contributions for washed-up performers and those whom 110 Higham, Ziegfeld, 83, he did not know who were enduring hardship.111 121, 125–126; “No Di- vorce for Billie Burke,” Washington Post, July Ziegfeld’s father was a German Lutheran father and his mother was 28, 1922; “Marilyn Will a French Catholic; he himself was baptized Catholic. However, pre- Make Jack Wait,” Chica- go Daily Tribune, May 30, sumably because of his name and profession, he was oft en mistaken 1922; “Billie Burke Sails 112 Into Miss Miller,” for being Jewish. This was no doubt encouraged by his eff orts to Chicago Daily Tribune, support the Jewish community. Ziegfeld was a longtime benefactor July 17, 1922. of New York City’s Israel Orphan Asylum, an institution for Jewish 111 Ziegfeld and Ziegfeld, children. He also supported Zionist causes abroad; in collabora- The Ziegfeld Touch, 182; Higham, Ziegfeld, tion with Abraham Erlanger, he provided his theater for free for a 127–28. benefi t performance that raised $9,000 for the Palestine Relief Fund 112 Mordden, Ziegfeld, 8; 113 in 1929. His generosity towards the Jewish community may be Mizejewski, Ziegfeld partially explained by the fact that, in addition to his fi rst wife Anna Girl, 56.

Held, many of his Broadway business partners and entertainers 113 “$9,000 For Palestine came from families of Jewish immigrants. In fact, Ziegfeld’s Broad- Aid,” New York Times, Sep. 23, 1929; “Deaths,” way shows stood out for helping Jewish performers such as Eddie New York Times, July 25, Cantor, Nora Bayes, and Fanny Brice become accepted as mainstream 1932. 114 entertainers. 114 Steward Lane, Jews on Broadway: An Histori- Ziegfeld thus wore many hats — philanthropist, gambler, debtor, cal Survey of Performers, Playwrights, Composers, and, of course, producer extraordinaire. Of the wealth he possessed Lyricists, and Producers (Jeff erson, NC, 2011), in life, he passed little on to his heirs in death. He had been stricken 38–41. with inﬂ uenza in 1920, and his health, from that time onward, in- 115 “Tellegen Has Inﬂ u- creasingly suff ered. In 1927, he developed bronchitis and by 1930 enza,” New York Times, was suff ering so severely that he was sent to the Bahamas to rest. Jan. 28, 1920; “Ziegfeld Has Bronchitis,” New Aft er an additional recovery period at a New Mexico sanitarium, York Times, Feb. 6, 1927; he returned to work on a movie production in Los Angeles, but “Ziegfeld Ordered to Rest,” New York Times, died shortly aft erward, on July 22, 1932, from complications from March 5, 1930; “Florenz pneumonia.115 In his will he left his estate entirely to his wife, Billie Ziegfeld Dies in Holly- wood.” Burke, and their daughter, Patty, with a request that the two support his mother with at least $500 per month; Rosalie Ziegfeld died a few 116 “Ziegfeld’s Estate Shared by Family,” New York months later, but, because she had been in a long-term comatose Times, August 6, 1932; state, never knew of her son’s death.116 It eventually emerged that “Mother of Ziegfeld, the Producer, Dead,” New Ziegfeld was bankrupt, having lost all he had in the stock market, York Times, Oct. 24, leaving Burke to pay off his debts.117 However, his fortune was his 1932. tremendous legacy. 117 Higham, Ziegfeld, 225.

HESTER | FLORENZ ZIEGFELD JR. 261 Conclusion Florenz Ziegfeld changed show business at the beginning of twentieth century. He helped create the classic Broadway show, transforming low-brow vaudeville and chorus line performances into a “spectacle” designed for the broad, emerging middle class. His Ziegfeld Girls contributed to the transformation of American views on femininity and helped bring about the New Woman of the Roaring Twenties. His later ventures into cinema, fi nally, aided the rise of the musical fi lm as a popular Hollywood genre. In 1936, Hollywood immortal- ized this colorful career in the Metro-Goldwyn-Mayer musical fi lm The Great Ziegfeld.

What added to the Ziegfeld mystique was that he made his way as an individual at a time widely regarded as the age of trusts. As big business became dominant in American economy and society, including the “entertainment industry,” Ziegfeld utilized structural changes in economies of scale, scope, and speed to his advantage as an individual impresario with a keen sense for marketing, publicity, and shift ing consumer demand. Ziegfeld, moreover, was a virtuoso producer of dreams of beauty for the middle classes, pushing and at times crossing moral, cultural borders set by the Protestant majority of Victorian America. Ziegfeld’s Follies and shows represented the desires of millions of Americans of native-born and immigrant origins no longer bound to the limits of their cultural background. Ideas of beauty, of becoming a star, of a dream of rags to riches, were contributors to Ziegfeld’s success. His entrepreneurial success demonstrates how business reshaped culture and how crucial components of American identity, namely ethnicity and gender, were deeply shaped by immigrant entrepreneurs.

Ziegfeld is also a prominent example for the integrative forces of the American nation. Educated in German culture, Florenz Ziegfeld was able to transcend the boundaries of his own cultural background. With this foundation, he helped to set standards for popular entertainment which Hollywood would later spread all over the world. A story like this — of a second-generation immigrant entrepreneur creating new, but now classically “American,” forms of entertainment — suggests the astonishing openness of American culture and business and the decisive role immigrants played in creating it.

Heather Hester is a former research and administrative assistant at the German Historical Institute and law student at Catholic University, Columbus School of Law.

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AN ORDINARY MAN AMONG TITANS: THE LIFE OF WALTER P. SPRECKELS

Uwe Spiekermann

Walter P. Spreckels was no extraordinary man. Born into great wealth, he was later forced to make his own living. His father was imprisoned for one of the most spectacular fraud cases in Germany at the turn of the twentieth century, and the family’s consequent loss of its wealth left young Walter to fend for himself. As a teenager, Spreckels emigrated to the United States to become a clerk in his cousin’s sugar factory in Yonkers, New York. He started a family and made a fi ne career as a sugar business executive. World War I interrupted this steady improvement when Spreckels was deemed an “alien enemy” and barred from his position. Spreckels became a U.S. citizen shortly aft erwards and was an engaged, well-known, and broadly accepted citizen in his hometown, Yonkers. He eventually rose to become president of the Syrup Products Company, a subsidiary of his former employer, the Federal Sugar Refi ning Company. However, Prohibition and the world economic crisis hit him hard. Indicted for selling denatured alcohol to bootleggers, he had to reestablish himself in business once again. Aft er years of fi nancial insecurity, the New Deal off ered him a new opportunity as a National Recovery Agency government representative. He eventually moved to California to act as a negotiator and mediator between companies and unions. In 1941, he resigned from the government and became a private industrial relations consultant. His small fi rm allowed him to make a middle-class living, which he enjoyed into his old age.

Walter Spreckels never made history, but he was shaken by history. The framework for his life between Germany and the United States of America was set by the perils of early twentieth century history and by others, namely the titans of his own family in Germany, New York, and California: his grandfather, banker and investor Peter Spreckels; his great-uncle, “sugar king” Claus Spreckels; and his two cousins, sugar manufacturer Claus Augustus Spreckels and banker and progressive reformer Rudolph Spreckels. His career was not unique but similar to the lives of tens of thousands of executives and smaller (immigrant) entrepreneurs who built the backbone of American business. Walter P. Spreckels was an ordinary man; as such, his life and his career were “signiﬁ cant.”

SPIEKERMANN | WALTER P. SPRECKELS 263 An Ordinary Man from an Extraordinary Family — Family Background Walter P. Spreckels was born as Walter Peter Heinrich Hahn in Dresden, Saxony, on February 4, 1888.1 His parents were Minna Hahn, née Spreckels, and Victor Hahn, later a leading banker and investor in Saxony and elsewhere. They had married in 1887.

The family’s wealth was predominantly based on the successful Figure 1: Walter P. career of Walter’s grandfather, the brewer, banker, and sugar pro- Spreckels passport photo, ducer Peter Spreckels (1839–1922). He was a younger brother of San 1919. National Archives, U.S. Passport Applica- Francisco “sugar king” Claus Spreckels (1828–1908), likely the richest tions, 1906–1925, series German-American immigrant entrepreneur of the late nineteenth M1490. Courtesy of the 2 National Archives. century. Peter, however, became a millionaire in his own right. Born in the rural village of Lamstedt, Kingdom of Hanover, he emigrated to the United States in May 1856 and was naturalized in Yuba, Cali- fornia on October 31, 1860.3 Following his elder brothers to San Francisco, he started his career as a clerk in the grocery and liquor business.4 He became involved in San Francisco’s Albany Brewery, established together with Claus Spreckels and his brother-in-law Claus Mangels in 1857, but he sold his interest aft er a few years.5 Together with Anna Lisette “Elizabeth” Grosse (1844–1912), a West- phalian woman he married in 1861, Peter Spreckels had four children 1 NARA M1085 Investigative Reports of the Bureau of who survived childhood: Agnes (1861), Walter’s mother Minna (1868), Investigation 1908-1922, Martha (1870), and Alfred (1872). The sugar business brought wealth Old German Files, 1909-21, Case Number 8000-350432 to the young family. Peter was — again together with Claus Mangels Application for Exception from and Claus Spreckels — involved in the establishment of the Bay the Classifi cation of Alien En- emy (in the following: NARA Sugar Refi nery in 1863 and, in 1867, the California Sugar Refi nery, M1085). capitalized at $300,000 (or $4.56 million in 2010 dollars).6 He also 2 Uwe Spiekermann, “Claus diversifi ed into the real estate business.7 In that year, he was already Spreckels: Robber Baron and Sugar King,” in IE. among San Francisco’s “rich men,” with an annual taxable income of $61,899 (or $13,100,000 in 2010 dollars).8 Peter Spreckels, who was 3 NARA U.S. Passport Applica- tions, January 2, 1906-March active in the German-American community of San Francisco and 31, 1925, Collection Num- acted as one of the directors of the 1869 California Immigrant Union, ber ARC Identifi er 483830 / MLR Number A1 534, Series M1490, Roll 229. 6 United States of America, Relative Value of a U.S. purchasing power calcula- Petitioner, against the Dollar Amount, 1774 tor, and income/wages 4 San Francisco Directory American Sugar Refi ning to present,” Measuring- based on production (San Francisco, 1858), 256; Company, et al., Defen- Worth, 2015, http:// worker compensation. San Francisco Directory (San dants, Petitioner’s Exhi- www.measuringworth. Francisco, 1859), 267. bits, vol. 1 (New York, com/uscompare/ (ac- 7 Sacramento Daily Union, 1913), 29–30. The 2010 cessed March 4, 2015). June 22, 1869, 2. 5 Jimmie Don Conway, “Spreck- values are calculated us- An alternative method els Sugar Company: The First ing the purchasing power would be to measure 8 Robert von Schlagintweit, Fift y Years,” M.A. thesis, calculator given in Samuel investments according to Die Pacifi c-Eisenbahn in San Jose State University, H. Williamson, “Seven the relative share of GDP, Nordamerika (New York, 1999, 6–7. Ways to Compute the property based on the 1870), 169n.

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was a Lutheran, a freemason, and a regular traveler to Germany.9 He became a director, among other organizations, of San Francisco’s German Savings and Loan Society.10

Having made his fortune in the United States, Peter Spreckels left California in 1885 and settled his family in Dresden.11 Although still active in San Francisco’s real estate business, he became more and more involved in Saxony’s fi nancial sector, partnering with his new son-in-law, Victor Hahn (1860–1929), Walter’s father. The son of Dr. Heinrich August Hahn, school inspector of the Dresden district (Amtshauptmannschaft ), Victor Hahn married Minna Spreckels on May 3, 1887, and the couple had three children: Walter, born in 1888; Elisabeth, born in 1890; and Martha, born in 1898.12 Peter Spreckels, who remained a U.S. citizen, made large profi ts as the primary owner of the Dresden-based banking house Eduard Rocksch Nachf., a leading fi nancial institution in Saxony in the late 1890s, when his wealth was reported as being as much as $15 million (or approximately $2.92billion in 2010 dollars).13

Such a fortune seemed to off er a bright future for Walter, perhaps as successful as the careers of Claus Spreckels’ sons, who all became titans of American business: John D. and Adolph B. in San Francisco and San Diego, and Claus A. and Rudolph in California and New York. 12 Stadtarchiv Dresden, mar- The latter two in particular helped to shape Walter’s career. For more riage register, sequence than a decade, Walter’s father, Victor Hahn, seemed to be a fi gure 22, reference 3.2, certifi - cate no. 255; Staatshand- of similar status. He came from a solid bourgeois background, but buch für das Königreich with his father-in-law’s fi nancial backing he became head of Eduard Sachsen. 1877 (Dresden, 1876), 438. Rocksch Nachf. Hahn’s business strategy, which was akin to that of modern-day private equity fi rms, was simple and effi cient: he 13 “Why Peter Spreckels Failed,” Hawaiian Star, invested in failed or endangered private businesses, added capital, August 16, 1902, 1. and re-organized the fi rms for a better and more profi table future. “Nachf.,” short for “Nachfolger,” means Hahn and his father-in-law made dozens of deals in the brewing, “and successors”; its photography, textile, and armaments industry.14 Aft er a downturn meaning is akin to the use of “& Co.” in Anglo-Saxon in the U.S. stock market, in 1901–1902, one of the Rocksch fi rm’s fi rm names. most important investments, the Vereinigte Electricitätswerke AG, 14 An impression of the industrial conglomerate 9 All about California and the Burst of Bank Aff airs,” Correspondent reported controlled by Hahn the Inducements to San Francisco News Letter (Sep. 23, 1885, 4) and Peter Spreckels is Settle There (San 26, Jan. 6, 1877, 12; that Peter Spreckels given in Die Sächsischen Francisco, 1875), 6. San Francisco Real Estate left the United States Actien-Gesellschaft en, Circular 9, no. 4, Feb., aft er losing, together ed. Richard Börner, 10 “The Western Savings 1875; Sacramento Daily with his brother Claus, 7th ed. (Berlin, 1897); and Trust Company,” Union, Nov. 11, 1874. $5,000,000 in specu- Jahrbuch der Berliner Sacramento Daily Union, lation, but there is no Börse 1900/1901, May 12, 1873, 2; “What 11 The Baltimore newspa- evidence to support this 22nd ed. (Leipzig, the Bulletin Said About per Der Deutsche claim. 1899).

SPIEKERMANN | WALTER P. SPRECKELS 265 stumbled, harming its stability.15 The ﬁ nal blow to the ﬁ rm came from the severe losses of the Sebnitzer Papierfabrik in 1902, which caused a liquidity crisis. Eduard Rocksch Nachf. was no longer able to pay its outstanding debts and stopped payments on August 1, 1902 “with assets nominally 10,000,000 marks and liabilities of 3,000,000 marks” (that is, $375 million and $71.5 million, respectively, in 2010 dollars).16

Peter Spreckels, before and aft er the failure, tried in vain to gain support from his San Francisco relatives.17 There were many rumors in

15 Zeitschrift für Elektrotechnik 20 the American press that Claus Spreckels or his sons might help Peter (1902): 388. Spreckels and his son-in-law.18 Shortly aft erwards, however, it be-

16 Salt Lake Telegram, August came clear than Hahn had tried to avoid bankruptcy with tricks and 5, 1902, 7. This calculation fraud, including embezzlement. Victor Hahn was arrested in July is based on a mark-to-dollar ratio of 4.198 in 1902 and 1903: “The arrest . . . came as a great surprise, as it was never sus- adjustment of 1902 dollars to pected that the failure of the ﬁ rm was caused through anything but 2010 dollars using the Pur- chasing Power Calculator. See lack of foresight of its members, far less that Mr. Hahn, who has Harold Marcuse, “Historical always enjoyed an excellent reputation, had committed any criminal Dollar-to-Marks Currency 19 Conversion Page,” http:// act.” Peter Spreckels was also investigated, but there was no evi- www.history.ucsb.edu/ dence he had committed any crime.20 Victor Hahn was prosecuted in faculty/marcuse/projects/ currency.htm, and Samuel H. fall 1904 for embezzlement and found guilty. He was sentenced to Williamson, “Seven Ways to four years of imprisonment in Bautzen and ﬁ ned 1,000 marks (or Compute the Relative Value of a U.S. Dollar Amount, $36,500 in 2010 dollars). With this, the respectable banker became 1774 to present,” Measuring- a criminal. This came as an immense surprise: Hahn had attained a Worth, 2015, http://www. measuringworth.com/ variety of prestigious positions over the course of his business career. uscompare/ (accessed March 4, 2015). He was a favorite of the Saxon court, and the honorable titles “Ge- heimrat” and “Kommerzienrat” had been bestowed on him along 17 “Peter Spreckels Fails,” Los 21 Angeles Herald, August 5, with many other decorations. He had also positioned himself as a 1902, 1. When Claus Spreck- patron of modern arts and served as treasurer of the important Ger- els died in 1908, his es- 22 tate still included a debt of man Art Exhibition (Deutsche Kunstausstellung) of 1899 in Dresden. $197,900 from Peter Spreck- els (“$10,000,000 in Spreck- The banker who had been a member of more than thirty boards of els Estate,” Oakland 23 Tribune, August 31, 1909, directors was now a persona non grata. For Walter, this white-collar 14). However, it is not clear crime broke up his family. His parents divorced and Minna Spreckels that this resulted from any 24 support in 1902. returned to using her maiden name. Walter P. Hahn thereaft er also

18 “Banker Goes Wrong,” Mor- ning Oregonian, August 1, 21 Juvenal, “‘Hahn,’” Das published by the Daily Tribune, Sep. 10, 1903, 2. neue Magazin für Litera- Vossische Zeitung 1905, B1; “Sachsen,” tur, Kunst und soziales and was reprinted in Der Deutsche Correspon- 19 “Begged Uncle Spreckels in Leben 73 (1904): Correspondenzblatt dent, Sep. 29, 1905, 3. Vain,” Cincinnati Enquirer, 341–346, here 345. der Generalkommission The change of the August 1, 1903, 9. der Gewerkschaft en last name became 22 Kunstchronik NS 9 Deutschlands 12 (1902): offi cial in June 1911 20 “Sensations-Prozeß gegen (1897/98), col. 171. 581-82. (Stadtarchiv Dresden, Viktor Hahn,” Der Deut- birth register, sequence sche Correspondent, Sep. 16, 23 A list of Victor Hahn’s 24 “Frau Hahn Gets a 63, reference 2.2, 1904, 1. business connections was Divorce,” Chicago certiﬁ cate 2304).

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adopted the name Walter P. Spreckels. His father had destroyed the fortune and, more importantly, the honor of the family. While Minna Spreckels received solidarity and support — Henry Horstmann, a California banker, vice-president of the German Savings and Loan Society, and a former trustee of the Spreckels’ California Sugar Reﬁ nery bequeathed her $5,000 in February 1905 ($696,000 in 2010 dollars) — the family’s funds were severely depleted.25 At the age of eighteen, Walter was sent to the United States of America, where his cousins Claus Augustus Spreckels and Louis Spreckels were ready to off er him a job in the sugar business.

In 1905, Claus Augustus “Gus” Spreckels (1858–1946), the son of the “sugar king” Claus Spreckels, owned the largest independent sugar refi nery in the United States. The American market was dominated by the plants of the American Sugar Refi ning Company (the “sugar trust”) in the East and the “Spreckels interests” in the West, who cooperated with one another. More than a decade earlier, in the early 1890s, Gus Spreckels had split from his father aft er a disagreement over whether the family should cooperate with or compete against the “sugar trust.” Claus’ two older sons, John D. (1853–1926) and Adolph B. (1857–1924), had sided with their father, and from then on Gus challenged his relatives whenever he could. Together with his younger brother Rudolph (1871–1958), Gus managed to make a 25 “Remembers All in his Will,” San Francisco Chro- fortune by acquiring control over the Hawaiian Commercial & Sugar nicle, Feb. 25, 1905, 27. Co., owner of Hawaii’s largest sugar plantation, in 1894 aft er a harsh 26 More on Gus’s version of public lawsuit against his father. Gus and Rudolph improved the these deals can be found plantation’s effi ciency and sold it with a profi t of “a couple million in U.S. House of Repre- sentatives, Hearings Held dollars” in 1898 to the Hawaiian company Baldwin & Alexander.26 Before the Special Com- mittee on the Investigation of the American Sugar Gus Spreckels then used this capital to establish a new refi nery in Refi ning Co. and Others Yonkers, New York, in 1902, based on a new sugar-refi ning tech- (Washington, 1911), 27 3:2209–16; quotation, nology. The industrial town, located just north of New York City, 2216. had advanced railroad and shipping facilities, was close to major 27 “To Build Big Sugar Re- centers of consumption, and had a strong community of skilled fi nery,” Chicago Daily Tri- German immigrants, useful for sugar manufacturing. In addition, bune, July 3, 1902, 11; “A New Process for Refi ning Claus Augustus could leave behind the quite hostile atmosphere Sugar,” Northern Star, in San Francisco and his wife could try to become part of New York August 27, 1902, 3.

City’s smart set. 28 The Manual of Statistics: Stock Exchange Hand-Book The Federal Sugar Refi ning Company was fi rst organized in New 1917, 39th ed. (New York, 1916), 546; Moody’s Ana- Jersey with sales offi ces in New York City and in 1907 reorganized in lyses of Investments, Part II: New York City.28 It was a highly profi table business venture, with Public Utilities and Indu- strials (New York, 1917), profi ts of, for instance, $3,227,463.80 in 1916–17 (or $267 million 1314.

SPIEKERMANN | WALTER P. SPRECKELS 267 in 2010 dollars).29 Gus Spreckels was the principal owner of the company, its public face, and the main decision-maker. However, he spent half of his time either in Paris, at his mansion on the French Riviera or, during the war, in California. For Walter, it was not his cousin Gus, but rather another cousin, Louis, who oversaw his training and promoted his career.

Figure 2: Federal Sugar Louis Spreckels, the son of Hinrich “Henry” Spreckels (1842–1877), Refi ning Company build- a brother of Claus and Peter Spreckels, was born in San Francisco on ing, seen from Hawthorne Avenue, Yonkers, 2013. February 7, 1870. Louis began his career at the age of sixteen as a la- Photograph by and cour- borer and then a clerk at the California Sugar Refi nery.30 He followed the tesy of Uwe Spiekermann. Spreckels family to Philadelphia, where in the late 1880s Claus Spreckels built up a huge sugar refi nery, the Spreckels Sugar Refi ning Company, to fi ght the sugar trust on the East Coast. Louis was one of the directors of this company, incorporated on May 14, 1890.31 He acted as an assistant general manager of the refi nery but switched to the independent McCahan Sugar Refi ning Company in Philadelphia in 1893, aft er Spreckels’s Philadelphia refi nery was sold to the sugar trust.32 In 1892, Louis Spreckels married Elizabeth D. Daley (1870–1936), the daughter of two non-German Philadelphia residents.33 The couple was child- less, and Walter may well have served as a surrogate son to the couple.

29 “Purses of Sugar Barons are Filled by ‘War Greed’ at Ex- 31 For additional details BEHonline/2010/ Spreckels 49,996 (of pense of the Poor,” New York see Uwe Spiekermann, spiekermann.pdf); 50,000). Evening World, City Edition, “Claus Spreckels: United States of July 13, 1917, 3. A Biographical Case America, Petitioner, 32 Boston Daily Adviser, Oct. Study of Nineteenth- against the American 7, 1893, 2. 30 Langley’s San Francisco Di- Century American Sugar Reﬁ ning Company, rectory for the Year Commen- Immigrant Entrepreneur- et al., Defendants, 33 U.S. Census, 1900, Phila- cing May, 1887 (San Fran- ship,” Business and Petitioner’s Exhibits, delphia, Ward 15, Phila- cisco, 1887), 1104; Oakland, Economic History vol. 1 (New York, delphia, Pennsylvania, Alameda and Berkeley City On-Line 8 (2010): 7–9 1913), 15–17. enumeration district Directory (San Francisco, (http://www.thebhc. Louis Spreckels sub- 0258, roll 1457, page 5B, 1888), 891. org/publications/ scribed one share, Claus FHL microﬁ lm 1241457.

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When the Federal Sugar Reﬁ ning Company of Yonkers started business, Claus Augustus Spreckels off ered his cousin Louis a position as superintendent. Later Louis was to become a general manager, director, and then vice-president of the company. He died of a heart attack in June 1929 as a respected businessman and Yonkers citizen.34 By then, Federal Sugar had become the second-largest reﬁ nery in the United States. Walter, together with his cousin’s widow and his own wife, was one of the leading mourners, expressing his respect for the cousin who had taken him under his wing.35

Personal Life and Business Development Born on February 4, 1888 in Dresden, Saxony, Walter P. Spreckels grew up in an upper-class milieu. He attended a private school, the Vitzthumsche Gymnasium in Dresden, at that time one of the most prestigious schools for boys in Saxony, until the age of seventeen.36 Educated in a humanistic tradition — the school’s motto was Goethe’s phrase “Ältestes bewahrt mit Treue, freundlich aufgefasstes Neue” (Old traditions well respected, innovations not rejected) — he learned not only Latin and Greek but also English. He arrived in the U.S. on April 12, 1906, “because I had to make a living as my mother was divorced and I felt I ought to work and not depend upon her.” He worked as a clerk in the Federal Sugar Refi ning Company of Yonkers and applied for naturalization in 1908, but was unable to complete the application process. He later explained he was “working hard » was one of the leading representatives of Protes- those days and it was diffi cult to go over from Yonkers to White tant opinion in discussion of social issues in Plains,” where the Westchester County courthouse that oversaw Germany. See Christine naturalizations was located. In 1911, he was reunited with his sister Kuller, “‘Stiefk inder der Gesellschaft ’ oder Elisabeth when she came to the United States to study for a graduate ‘Trägerin der Erneuerung’? degree at Bryn Mawr College.37 Familien und Familien- politik in Bayern 1945 bis 1974,” in Gesellschaft im 34 “Heart Spell Kills Sugar tails are, if not backed Meyer-Spreckels (1890– Wandel, 1949-1973, ed. Plant Head,” Yonkers States- by other sources, from 1974), eventually obtained Thomas Schlemmer and man, June 28, 1929, Spreckels’ 1919 case fi le a Ph.D. in chemistry in Hans Woller (Munich, 1–2; “Louis Spreckels, at the U.S. Bureau of In- Germany. She cut short 2001), 269–345, here 270. 62, Sugar Refi ner, Dies,” vestigation. See “Applica- her academic career when For more details, see New York Times, June 29, tion for Exception from the she married, in 1922, but Meyer-Spreckels’ 1946 1929; “Louis Spreckels,” Classifi cation of Alien En- aft er World War II began a speech “Marriage and Boston Herald, June 29, emy,” case number 8000- second career as a political Family in the Constitution 1929, 13. 350432, Old German Files activist, becoming instru- to the Bavarian Constitu- (1909–1921), Investiga- mental in securing the in- tional Assembly,” docu- 35 “Throng Attends Last tive Reports of the Bureau clusion of gender equality mented and translated Rites for Refi nery Head,” of Investigation (1908– in Bavaria’s constitution on the GHI’s German Yonkers Statesman, July 2, 1922), reel 781, NARA and founding the women’s History in Documents and 1929, 4. publication M1085. organization of the Chris- Images website (http:// tian Democratic Party in germanhistorydocs.ghi- 36 This information and the 37 Walter’s sister, who be- Germany. Throughout the dc.org/sub_document. following quotes and de- came known as Elisabeth 1950s and 1960s she » cfm?document_id=4480).

SPIEKERMANN | WALTER P. SPRECKELS 269 38 U.S. Social Security Death On November 20, 1912, Walter married Gertrude Stubberﬁ eld (1885– Index, 1935–2014, Number 38 555-21-7103, Issue State 1991) in Manhattan. She was born as Gertrude Alice Stubberfeld in California, Issue Date 1973; New York as the daughter of the English immigrant and butler Walter New York, New York, Mar- riage Indexes 1866–1937, Stubberfeld and his wife Mary “Marie” Stubberfeld, born in Oldenberg, Certiﬁ cate Number 27666. Schleswig-Holstein, Germany.39 She attended Hunter College in New

39 NARA 1900 United States York and lived with her parents until her marriage to Walter. The young Federal Census, Census Place: couple settled in Yonkers and lived in a series of apartment buildings Manhattan, New York, New York, Roll 1105, Page 7A, Enu- located less than half a mile from the Federal Sugar establishment, in meration District 0518, FHL a neighborhood densely inhabited by German immigrants.40 microfi lm 1241105. Together with her mother and her older sister Jenny “Jone,” Gertrude On January 1, 1914, Walter became assistant superintendent of the visited Holstein in 1895 (Staat- sarchiv Hamburg, Hamburger Federal Sugar Refi ning Industry Co., Yonkers, a rank also held by his Passagierlisten 373-7 I, VIII A cousin Henry Peter Spreckels (1877–1958), a younger brother of Louis, 1 Vol. 091, Page 0, Microfi lm 41 K_1753). Her two siblings died who had previously worked as a draft sman in San Francisco. Though in childhood. the Spreckels family was sometimes shaken by internal quarrels, its

40 Richmond’s Thirteenth members acted like many other immigrant families in providing jobs, Annual Directory of Yonkers, when available, to other relatives.42 1912 (Yonkers, 1912), 731; Richmond’s Fourteenth Annual Directory of Yonkers, 1913 The improved ﬁ nancial situation allowed Walter and his wife to a rent (Yonkers, 1913), 736. a house at 19 Cedar Place, Yonkers.43 Walter was discharged from

41 Crocker-Langley San Francisco his German military service requirement and released from his Ger- Directory for the Year Ending man citizenship. Being stateless, on November 6, 1916, he applied a October 1908 (San Francisco, 1908), 1662; Turner’s Nine- second time for naturalization. He was registered for the U.S. draft on teenth Annual Directory of June 5, 1917 and did not attempt to claim an exemption.44 On February Yonkers 1910 (Yonkers, 1910), 726; entries for “Spreckels” in 9, 1918, however, he was registered as an “alien enemy” in Yonkers, Richmond’s Annual Directory of like more than 250,000 other Germans living in the United States.45 Yonkers (Yonkers, 1916–1918).

42 For another example, com- In an interrogation by the U.S. Bureau of Investigation (later the FBI) pare the history of the Uihlein family of Milwaukee. in April 1919 Walter proclaimed that he had “lost all sympathy with Germany aft er the sinking of the Lusitania.” Formally stateless, he in- 43 New York State Population Census Schedules, 1915; Cen- sisted that he was fully loyal to his new homeland, declaring that of his sus Place: Election District 03; $5,000 salary (or $63,000 in 2010 dollars) he had spent $360 ($4,540 Assembly District 01, Yonkers Ward 04, Westchester, 05. in 2010 dollars) to purchase Liberty Loan bonds and other war securities and that, owing to his monthly rent and the “advanced” cost of 44 NARA U.S. World War I Draft Cards, 1917–1918, Registra- living, “I did not think I could aff ord to buy any more.” The agent who tion State New York, Registra- spoke with Spreckels reported that, in his opinion, “applicant’s wife tion County Westchester, Roll 1819399, Draft Board 1. knows nothing about house-keeping and is naturally extravagant.” In his application for exception from the alien enemy classiﬁ cation, 45 See also Marilyn E. Weingold and the Yonkers Historical Walter gave further details about his family’s continuous support of Society, Yonkers in the the U.S. war eff ort: “My wife knitted for the Red Cross, she belongs to Twentieth Century (Albany, 2014), 49; Arnold Krammer, the Gamma Tau Kappa fraternity of Hunter College and made dresses Undue Process: The Untold for the Belgian children in connection with her fraternity. She collected Story of America’s German Alien Internees (Lanham, 1997). for the Red Cross Drive as a worker. We are both members of the Red

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Cross — $5.00 members. I was also a Red Cross Captain in the Federal Sugar works. I assisted . . . to sell Liberty Bonds at night, canvassing restaurants. We had a singer with us and covered lower New York City around Greenwich Village.” Spreckels added that he and his wife had given on other opportunities, as well.

46 “Spreckels Barred from World War I had reconfi gured the international sugar market and Refi nery as an Alien made the company react publically to events. The Federal Sugar Re- Enemy,” New York Evening World, May 1, 1918, fi nal fi ning Company of Yonkers, which produced 10,000 barrels of sugar a edition, 6; “Sugar day and controlled approximately ten percent of the U.S. sugar refi n- Famine Laid to Hoover,” Salt Lake Telegram, Dec. ing business, and was owned and run by U.S.-born and naturalized 14, 1917, 1. citizens (although of German descent), made similar public eff orts to 47 “W.P. Spreckels Barred associate itself with the surge of American patriotism. Superinten- From Big Sugar Plant,” New York Times, May 1, dent Louis Spreckels “has been intensely active in the Third Liberty 1918, 11. Loan drive,” the New York Evening World reported, “and last night 48 “Spreckels Barred as Alien headed the 1,500 employees of the factory in a Liberty Loan parade. Enemy from Own Plant,” His forbears have always been among the most patriotic men and Salt Lake Telegram, May 1, 46 1918, 5. It has to be women of the country.” added that the U.S. offi cials were able to This was of no help — at least not for Walter. When the war zone make exceptions. See, for instance, Christina A. of New York’s port was extended up the Hudson River to Yonkers in Ziegler-McPherson’s bi- late April 1918, an estimated 10,000 persons had to obtain permits to ography of Wilhelm J.D. Keuff el online in IE. remain within the area. Walter was “barred” from Federal Sugar’s factory by the decree.47 Aft er being notifi ed of the situation by the police 49 “Bar Spreckels as Alien at Own Sugar Factory,” on April 30, he went to work at the general offi ces of the company Chicago Daily Tribune, in Wall Street, Manhattan.48 Although Spreckels’ case was similar May 1, 1918, 1. to that of many other Germans in the United States, the prominence 50 Wall Street Journal, May of the Spreckels family, still one of the richest and infl uential in the 2, 1918, 2. Other journalists made him a “general country, caused Walter’s case to receive broad public attention. The manager for 16 years” (“Walter Spreckels Denied “alien enemy” was inaccurately described as a nephew of the elder Entrance to Sugar Plant,” Claus Spreckels.49 Newspapers called him the “general manager” who Tulsa Daily World, May 2, was forbidden to enter “his plant.”50 Another headline was: “Sugar 1918, 2). King Walter Spreckles [sic] Declared to Be Enemy Alien.”51 Dozens 51 Daily Ardmoreite, May 1, 1918, 4. of newspapers reported that he had “lived here 30 years and never been naturalized.”52 Sometimes, editorialists made jokes: “Maybe 52 “Tough on Walter,” She- boygan Press, May 4, 1918, a mistake has been made in Walter’s case. Any Spreckels with his 2. Others informed their hands in our sugar that long likes America well enough to be safe.”53 reader that he “has been in this country for 20 years” (“Walter Spreckels Said For Walter it was less than funny that he remained excluded from to Be Enemy Alien,” his workspace and had to deal with bureaucrats to regain his former [Marshall] Evening Chronicle, May 1, 1918, 1). status. He told them what they wanted to hear, even if this was very unlikely: “I learned English at home in Dresden,” he told the Bureau 53 “Tough on Walter,” Bismarck Tribune, May 6, of Investigation. “We always spoke it, mother would not permit us 1918, 4.

SPIEKERMANN | WALTER P. SPRECKELS 271 to use German in the house. I read the ‘Times,’ ‘Globe,’ ‘World’ and ‘Commercial Journal’ but no German papers. I belonged to the Plea- sure Club in Yonkers, for some years; this is a social organization of Americans. I never associated with Germans at all here. I never knew any of the German representatives in this country.” His distance from Germany or German affi liations was confi rmed by several witnesses, 54 List of United States Citizens, and even the offi cial agent found Spreckels “a perfect type of young 1920, October 6: Noordam. American in appearance. Ther [sic!] was absolutely nothing German 55 Allen Ray Kahn, Sugar: about his manners, thought or any other way.” The wages of fear was A Popular Treatise (Los Ange- les, 1921), 64. his naturalization on November 28, 1919 at the Supreme Court of White Plains, New York.54 56 NARA, Passport Applica- tions, January 2, 1906-Mar 31, 1925, Series 1490, Roll His fi rst moment of public notoriety had disgraced Walter, but at work 1206. Comp. NARA Pas- senger Lists of Vessels Arriv- he was promoted. His position was renamed to “assistant general ing at New York, New York, manager,” essentially a vice-president. Walter was now listed among 1820-1897, Year 1920, Ar- 55 rival New York, New York, the top executives of the Federal Sugar Refi ning Company. The 5 foot, Microfi lm Publication T715, 10.5 inch [179 cm] tall man with blue eyes, medium forehead, nose, 1897-1957, Microfi lm Roll 2848, Line 12, Page 151. and mouth, dark brown hair, a normal chin, a fair complexion, and an oval face, was sent on a longer business trip to the Netherlands. From 57 NARA 1930 United States 56 Federal Census, Place: Sum- May until October 1920, he traveled “because of sugar.” The tumult mit, Union, New Jersey; Roll caused by the war appeared over and great success seemed imminent. 1389; Page 6B; Enumeration District 0153; Image 878.0; FHL microfi lm 2341124. In 1920, aft er eight years of marriage, Gertrude A. Spreckels gave birth to Walter P., Jr., followed by daughter Barbara in 1924.57 The 58 Richmond’s Twenty-First An- nual Directory of Yonkers young family had already moved to a better home at 83 Highland (Westchester County, NY) Avenue, still very close to the sugar refi nery, where they probably 1920 (Yonkers, 1920), 578; Richmond’s Yonkers (New remained until 1929.58 In the mid-1920s, Walter not only managed York) City Directory 1928 the company, but also contributed to the improvement of its internal (New York, 1928), 754. production process. The company’s technological lead had shrunk 59 Offi cial Gazette of the Uni- ted States Patent Offi ce 303 by the early 1920s. In 1922 Spreckels received a patent for a new (1922): 295-96. method of packaging cube sugar.59 His use of a vacuum to accelerate

60 The Federal Refi ning Company, the labor-intensive packaging procedure focused on one of the costly Yonkers, once established to weaknesses of sugar business. Strong consumer brands like the sugar fi ght the sugar trust and its main brand, paradoxically trust’s “Domino Sugar” were exceptions, and many companies still became part of the American depended on retailers to downsize bags and barrels of sugar.60 In April Sugar Refi ning Company aft er the receivership in the 1930s 1928, Walter fi led a second patent claim, resulting in a 1932 patent. and today is one of the lead- This time he focused on the already mechanized process of washing ing producers of “Domino 61 Sugar.” and concentrating raw sugar and syrup.

61 US Patent 1,844,020, patented Such patents illustrate the technological modernization of the sugar February 9, 1932. Application ﬁ led April 25, 1928. Serial industry in the 1920s. One crucial change was the more effi cient use No. 272,619; “Spreckels Gets of by-products and so-called “waste.” A new internal department, Sugar Patents,” Yonkers Statesman, Feb. 10, 1932. later spun off as a subsidiary called the Syrup Products Co. of Yonkers,

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began producing denatured alcohol from waste syrup in 1923. This process also allowed for the production of one to fi ve tons of artifi cial (“dry”) ice per day.62 Prohibition enforcement agencies closely scru- tinized producers of “industrial alcohol.”63 It is not surprising that the new company soon had to face accusations of “illegal diversion of alcohol.”64 In one case, a warehouse agent was sentenced to six months’ imprisonment and a fi ne for conveying alcohol to bootleggers, while several other suspects were acquitted.65 62 “Jenkins, New Refi nery Head, Helped Build Origi- nal Plant,” Yonkers States- However, this was just one of many problems Walter had to face as man, July 11, 1929, 20. an assistant general manager. The company had reached the peak 63 For additional details of production and profi tability right aft er the end of World War I. see “Prohibition (1919- At that time, 18,000 barrels were produced per day, and net profi ts 1933),” in IE. of more than fi ve million dollars ($353 million in 2010 dollars) had 64 “Executive of Chatham’s Sentence Suspended,” accumulated between August 1919 and May 1921. The Federal Sugar Daily Argus, March 22, Refi nery’s workforce numbered nearly 3,000 workers and it was the 1926, 1. second-largest refi nery in the United States. The fi rm was a model of 65 “Indict 2 in Booze Plot entrepreneurialism with a touch of paternalism. This foreshadowed at Warehouse,” Syra- cuse American, Jan. 17, Walter’s later interest in industrial relations. For instance, aft er three 1926, 2. months’ employment, workers were insured, and the company sup- 66 T. Edward Tonnard, ported a mutual aid association that supplied sickness and death “City of Yonkers Refi nes benefi ts. It had its own fi re department, which was also a social orga- 5,600,000 Pounds of Sugar Daily,” Yonkers Sta- nization for the employees. Similarly, the Federal Athletic Club cared tesman, Dec. 21, 1921, 4; for much more than the athletic training of younger employees.66 “5,331,204 Surplus for Federal Sugar,” New York Times, June 21, 1921, 29. Global agricultural overproduction aft er World War I hit the sugar For further discussion of business hard even aft er the sharp postwar recession of 1920–21 typical employee benefi ts in the manufacturing sec- ended. Sugar prices tumbled to a record low in 1920, and Cuba’s tor during the interwar years, see Andrea Tone, rise to the world’s largest sugar producer kept prices depressed. U.S. The Business of Benevo- tariff politics favored American investments in Cuba: it was oft en lence: Industrial Paterna- lism in Progressive America cheaper to import refi ned sugar from the U.S. protectorate than to (Ithaca, 1997). refi ne raw sugar in Yonkers. In October 1922, the Yonkers refi nery 67 67 “Sugar Price Too High; was forced to close for more than three months. “Gus” Spreckels Refi nery Will Close,” resigned as chairman of the board, and the company faced drastic Chicago Daily Tribune, Oct. 14, 1922, 19; Decatur Re- cuts because it generated high losses. By 1927, it had approximately view, Jan. 11, 1923, 14. 800 workers. The re-organization of the Federal Sugar Company into 68 District Court of Appeal, the $20,000,000 ($1.13 billion in 2010 dollars) Spreckels Sugar Cor- First District, Division 2, poration in 1929 tried to overcome this. Aft er Claus Augustus retired California. Raine v. Spreck els et al., 77 Cal.App.2d 177, due to health reasons, his younger brother Rudolph invested no less 174 P.2d 857, (3)-(4). than $12,200,000 ($687 million in 2010 dollars) in the fi rm between 69 “Banks Merged By Spreck- 68 1927 and 1929 and became owner of almost all of its stock. In 1929, els,” Yonkers Statesman, the company was reorganized as the Spreckels Sugar Corporation and April 2, 1927, 1; “Spreck- els Sugar,” Time, Feb. 4, Rudolph Spreckels took on an active interest in its management.69 1929.

SPIEKERMANN | WALTER P. SPRECKELS 273 Depressed prices and reorganization were both a challenge and an opportunity for the reﬁ nery’s executives. The reorganization of 1927 provided more independence to Spreckels Sugar’s subsidiaries. In late 1927, Walter became president of the Syrup Products Company,

70 Richmond’s Yonkers Directory which was spun off as a separate operating unit with a tax assessment 1927 (New York: R.L. Polk, of $170,000 in 1929 (or $9.57 million in 2010 dollars). The leadership 1927), 667; Richmond’s Yonkers (New York) City of this modern and proﬁ table company on the eve of the Great De- Directory 1928 (New York, pression was the climax of his entrepreneurial career.70 Although 1928), 754; “Tax Evalua- tions on Industries Left Un- not an owner, he was now the decisive executive with a ﬁ duciary changed,” Yonkers Statesman, responsibility toward the dominant shareholder, his cousin Rudolph Oct. 2, 1929, 1. Spreckels. For instance, when the presidents of every alcohol distilling 71 “Alcohol Makers in Confer- company in the United States met in March 1928 in New Orleans, Walter ence,” Times-Picayune, March 2, 1928, 3. P. Spreckels was among them.71 The now forty-year-old immigrant

72 “Stone Named Head of seemed to have a chance for an extraordinary entrepreneurial career. Spreckels Company,” Yonkers Statesman, July 13, 1929, 3. Yet just over a year later, the ambitious young man had “retired.”72

73 “Spreckels Sugar Corpora- In June 1929, his cousin Louis Spreckels, who had done so much tion,” Wall Street Journal, July to foster his career, died. Louis Spreckels was succeeded as general 11, 1929, 13; “Jenkins, New Refi nery Head, Helped Build manager by the Scottish immigrant Peter Jenkins, and not by Walter. Original Plant,” Yonkers Sta- As senior management positions were given out to other men, it was tesman, July 11, 1929, 20. obvious that Walter’s position was precarious.73 Two weeks later, on 74 Facts about Sugar 24 (1929): July 10, 1929, the board of directors elected Edward H. Stone to re- 681. For a more general perspective on the history and place Walter P. Spreckels as president of the Syrup Products Compa- perception of business failure, ny.74 At the same time, many executives of the Federal Sugar Refi nery, see Scott A. Sandage, Born Losers: A History of Failure the parent company, were replaced. As in 1918, Spreckels at fi rst in America (Cambridge, MA, went to the Wall Street sales offi ce of the refi nery. For a time, his in- 2005). formal title was “former president, Syrup Products Co. New York.”75 75 Drug Markets 29 (1931): 177. Yet he never went back to Yonkers or Federal Sugar. His family left 76 Polk’s Yonkers (New York) City Yonkers and resettled at 11 Sherman Ave, Summit, New Jersey — in Directory 1929 (New York, $ $ 1929), 686; NARA 1930 a newly purchased home valued at 25,000 ( 580,000 in 2010 dol- United States Federal Census, lars).76 What had happened? The public did not learn the story for Place: Summit, Union, New Jersey; Roll 1389; Page 6B; nearly two years. Enumeration District 0153; Image 878.0; FHL microfi lm In May 1931, federal offi cials revealed that a grand jury had been 2341124. investigating what was described as “a gigantic bootleg ring” involv- 77 “Alleged Rum Ring Records ing more than a dozen companies, including the Syrup Products Subpoenaed,” Washington 77 Post, May 8, 1931, 13; “Jury Company. The investigation found that these companies had been Indicts Syrup Firm with Ring,” “cracking” various products — including “paint solvent . . . insecti- Yonkers Statesman, July 21, 1931, 1. cides . . . [and] candy glaze” — to extract industrial alcohol and divert it to bootleggers’ use. The Federal Grand Jury charged “a nation-wide 78 “Companies Valued at 78 Millions Indicted as Dry Law conspiracy to evade the dry laws.” The industrial alcohol investiga- Violators,” Christian Science tion’s $500,000 cost (or $38.8 million in 2010 dollars) made it one of Monitor, July 21, 1931, 1 (also for the next quotation). the most expensive under the Volstead Act; to critics of Prohibition

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its ﬁ ndings of large-scale participation in evading Prohibition were unsurprising.79 Obviously U.S. chemical companies were among the largest beneﬁ ciaries of the new alcohol regime prohibition enforcement had enacted. Among those indicted were the Syrup Products, Inc.; the company’s sales agents, Roessler and Hasslacher; and William L. Due, another Syrup Products executive.80

The Syrup Products Company denied that it was in any way connected with that indictment. Peter Jenkins, Louis Spreckels’ successor, pointed out, “that Mr. [Walter] Spreckels is not now connected with it and that the acts alleged against it occurred several years ago.” The investigation indicated that the Syrup Products Company had been selling its industrial alcohol with the help of Roessler & Has- slacher, and both companies seem to have cooperated in violation of 83 “Rudolph Spreckels for the Volstead Act. However, it is not clear whether Walter was ac- Smith as Wet,” New York Times, Sep. 6, 1928, 3. tively involved in bootlegging industrial alcohol or whether he pre- Claus Augustus Spreck- ferred not to know too much about what was going on.81 Nor is it els was a member of the Association Against the clear if his dismissal was a sacrifi ce to cover up broader involvement Prohibition Amendment by Spreckels Sugar executives in this profi table but illicit business. (“One Liquor Group has pledged 400,000 to scrap The Syrup Products Company, which went into receivership in 1930, dry Laws,” Christian never paid any fi nes in this matter.82 While the fi rm publicly sup- Science Monitor, July 13, 1922, 1). Founded in ported Prohibition enforcement, Claus Augustus and Rudolph 1918, it was supported by Spreckels were among those who supported U.S. presidential candi- many German-American immigrant entrepreneurs. date Al Smith’s 1928 campaign and Franklin D. Roosevelt’s 1932 Comp. Daniel Okrent, Last 83 Call: The Rise and Fall of campaign against the Volstead Act. Prohibition (New York, 2010), 233–34, 295–99. For Walter, this second moment of public notoriety was surely even 84 While the case continued more disgraceful than his temporary classifi cation as an “alien for several years, the Syrup enemy.” Although he was not imprisoned or fi ned, the aff air was Products Co. never paid any fi nes for its alleged activi- a reminder of his father Victor Hahn’s embezzlement. Spreckels ties. For the continuation stumbled, but he did not fall like his father. While he lost his posi- of the offi cial claims see “Syrup Products Co. Sued tion as president of a large company, he did not share the fate of on Diversion,” Brooklyn the 1,200 men who in 1930 lost their jobs when Spreckels Sugar Daily Eagle, May 23, 1934, 24. Rudolph Spreckels di- 84 Corporation went into receivership. Walter P. Spreckels still had rectly contacted President credit and capital. Roosevelt about the case (“Spirits Code is Protested,” New York Sun, Dec. 11, 79 For a broader perspective [Hagerstown], July 21, biography of immigrant 1933, 3). For a taste of the see J. Anne Funderburg, 1931, 1, 4, here 4. entrepreneur Jacob fate of Spreckels Sugar Cor- Bootleggers and Beer Hass lacher (1852–1921) poration’s employees, I rec- Barons of the Prohibition 81 “Alcohol Plants Indicted online in IE. ommend Christy Moore’s Era (Jeff erson, for Plot to Divert Prod- song “Ordinary Man” — 2014). uct,” San Antonio Express, 82 For further information, even if it covers a later July 21, 1931, 1–2, here see “Syrup Products Co. period in history: https:// 80 “Federal Jury Closes 2; American Chemical Sued on Diversion,” www.youtube.com/ Probe in Baltimore,” Industry 4 (1948), 162. Brook lyn Daily Eagle, watch?v=L6ZUYU4tWUU. Morning Herald Comp. Joris Mercelis’ May 23, 1934, 24. It inspired this article.

SPIEKERMANN | WALTER P. SPRECKELS 275 Aft er his resignation from Syrup Products, Spreckels fi rst worked for a short while for the Federal Cooperage & Bag Company of New York, a subsidiary of the Spreckels Sugar Corporation. He was next employed by P. Ballantine & Sons of Newark, New Jersey, a once-renowned brewery founded by Scottish immigrant entrepreneur Peter Ballantine (1791–1883). During Prohibition, it focused on manufacturing cereal products.85 In 1933, it renewed brewing under the management of second-generation German immigrant entrepreneurs Carl William Badenhausen (1893–1981) and Otto August Badenhausen (1895–1966). Spreckels worked here in a management position, though he was no 85 “Spreckels Given Labor Board longer as prominent as he had been at his cousins’ company. Post,” New York Sun, Sep. 8, 1939; “Jury Indicts Syrup Firm with Ring,” Yonkers Sta- Political changes aft er 1933 opened up new opportunities for Walter. tesman, July 21, 1931, 1. He became a representative of the National Recovery Administra- 86 A productive interpretation is tion, a New Deal agency whose principal goal was to establish Wolfgang Schivelbusch, 86 Three New Deals: Refl ec- “fair” practices in business. Spreckels became a member of the tions on Roosevelt’s America, retail drug code authority in New York City. As such, he negotiated Mussolini’s Italy, and Hitler’s Germany, 1933–1939 (New with representatives of mom-and-pop pharmacies, chain stores, York, 2007). On broader and drug and cosmetics producers to eliminate “destructive” price questions of price and wage 87 fi xing see Meg Jacobs, Pocket- and service competition. While the Supreme Court declared the book Politics: Economic Citi- agency unconstitutional in 1935, Spreckels remained in govern- zenship in Twentieth-Century America (Princeton, 2005), ment and co-authored a small technical article with Raymond M. 95–175. Wilmotte et al. on “Activities of the Code Authorities.”88 In 1935, he

87 Mark Merrell, E.T. Grether shift ed to the Works Progress Administration and became the chief and Sumner S. Kittelle, Re- of the Labor Policies Section in New York City, where he dealt with strictions of Retail Price Cut- 89 ting with Emphasis on the labor relations. The goal of this New Deal agency was to reduce Drug Industry (Washington, unemployment by carrying out public work programs such as the 1936), 48. construction of new parks, roads, or schools, which Spreckels had 88 In National Recovery Admin- previously promoted in Yonkers (see below).90 istration, Code Authorities and Their Part in the Administra- tion of the NIRA (Washing- These local experiences, combined with his work in labor relations at ton, 1936). the Federal Sugar Refi ning Company, were important arguments for 89 Henry N. Dorris, “Says WPA Walter P. Spreckels’ appointment as director of the National Labor Favored A.F.L. in this Area,” New York Times, June 6, Relations Board offi ce in Los Angeles. Aged 51, he again accepted a 1939, 1. challenge. The family arrived in California in September 1939, not 91 90 A good overview is given in long aft er German troops invaded Poland. The National Labor Rela- Donald S. Howard, The WPA tions Act had codifi ed a new framework for collective bargaining, with and Federal Relief Policy (New York, 1943). local boards supporting the organization of workers by administering union elections at large companies and branch plants and appointing 91 “Spreckels Assumes New Du- ties on Labor Board,” Riverside collective bargaining agents. Daily Press, Sep. 13, 1939, 2; “Easterner Selected L.A. La- The late 1930s were characterized by growing strength of conservative bor Director,” Bakersfi eld Cali- fornian, Sep. 11, 1939, 2. positions on the one hand and the intense fi ght between the two

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leading unions on the issue of industrial unionism on the other hand, the American Federation of Labor (AFL) and the Congress of Industrial Organizations (CIO).92 Walter P. Spreckels represented a centrist position in these hard struggles. He was a Republi- can and surely not one of those left ists who unintentionally weakened the position of the National Labor Relations Boards vis-à- vis business and the Republican Party. While a majority of the boards’ representatives favored the CIO and industrial unionism, Spreckels came to California with a diff erent agenda. In New York, he had favored the AFL.93 In Los Angeles, the Labor Board was dominated by left -wing fi eld in- vestigators affi liated with the CIO who had been appointed under Spreckels’ predeces- sor. During the fi rst three months of his appointment, Walter replaced six of them.94 Figure 3: Walter P. Spreckels (upper left ) In Southern California, at the time one of the fastest-growing regions announces the results of a unionization ballot at of the United States, Spreckels managed diff erent and sometimes Gilmore Stadium, Holly- contradictory tasks in the course of organizing union elections and wood, 1939. Private collection. Courtesy of 95 mediating labor disputes. The fi rst case he was involved in regarded Uwe Spiekermann. the representation of the International Alliance of Theatrical Stage Employees (IATSE) and ended with a convincing AFL victory.96

A company union won his second case, at Douglas Aircraft Company, while the CIO was victorious in a drive to organize packing plants.97

92 The American Federa- all workers of an industry 93 Dorris, “Says W.P.A. tion of Labor, founded in or a larger company were Favored.” 1886, was by far the larg- organized by only one 96 “Alliance Wins Studio est U.S. union, while the union. Once dominant 94 Louis B. Perry and Fight,” Ogden Standard Congress of Industrial in many branches, com- Richard S. Perry, A History Examiner, Sep. 21, Organizations was estab- pany unions were severely of the Los Angeles Labor 1939, 14; “A.F.L. Union lished in 1935, broke with weakened by the National Movement, 1911–1941 Wins Control,” San the AFL in 1936, and re- Labor Relations Act, but (Berkeley, 1963), 496. Mateo Times, Sep. 21, organized itself as a labor were still relevant actors. 1939, 5. union in 1938. While the As an introduction see 95 On the corporate culture AFL tended towards craft Philip Jacques Dreyfus, of this region see Clark 97 “Independent Union unionism — in this case, “Industrial Unionism,” in Davis, Company Men: Wins,” Oakland Tribune, workers are organized ac- Encyclopedia of U.S. Labor White-Collar Life and Nov. 10, 1939, 12; “CIO cording to their skills and and Working-Class His- Corporate Cultures in Union Named as Pack- their positions — the tory, vol. 1, ed. Eric Los Angeles, 1892– ing Plant Agency,” Berke- CIO favored industrial Arnesen (New York, 2007), 1941 (Baltimore, ley Daily Gazette, Jan. 31, unionism — in that case 650–52. 2000). 1940, 14.

SPIEKERMANN | WALTER P. SPRECKELS 277 It was also victorious at the American Potash and Chemical Coop- eration of Trona, while the AFL won the vote of the Seaboard Lemon Association at Oxnard.98 Spreckels was apparently more reluctant to accept the CIO’s small victories, particularly in branches of military importance such as the aviation and aircraft motor industries, and occasionally asked the Washington headquarters to revisit and potentially overturn CIO victories.99 In some cases, this led to strike threats by the CIO, but the framework of the national defense program eventually smoothed down such union activism.100

While the structural antagonism of the leading U.S. unions could not be solved or even smoothed during Walter’s directorate, the Los Angeles National Labor Relations Board successfully empowered a better representation of unorganized workers. Spreckels tried to establish the rights of unions to collective bargaining against “capital,” while business representatives attempted to establish employer- dominated unions, formed secret organizations, and established spy or police systems among employees to report union activities, sometimes organizing groups of housewives to promote “back to work” movements during strikes.101 In other cases, Spreckels ordered elections against managers’ and business owners’ wishes.102 Simultane- ously, however, the regional agency also ended unsuccessful strikes 98 Bakersfi eld Californian, Dec. or decided on the representatives for collective bargaining.103 23, 1940, 8; “Pick Bargaining Agent,” Bakersfi eld Californian, Throughout his directorate, Spreckels was challenged by both con- Jan. 21, 1941, 8. servative politicians and by unions.104 99 “C.I.O. Union Leads in Los Angeles Plant Election,” Co- While professionally he was caught between two stools, his family rona Daily Independent, Feb. 3, 1941, 1; “Bargaining Vote settled in 7357 Woodrow Wilson Drive, Los Angeles, a single-story at Aviation Plant Set,” San home in the Hollywood Hills, one mile south of Universal Studios, Bernardino County Sun, Feb. 5, 105 1941, 4; “Unions Deadlocked near the well-known Mulholland Drive. Despite this professional at North American,” San Di- and personal restart to his life and with another war looming, it is ego Union, Feb. 21, 1941, 1; “C.I.O. is Designated Bargain- clear that he wanted to avoid any struggles similar to those in 1918 ing Agent in Aircraft Plant,” and 1929. In the 1940 Census, Walter P. Spreckels gave false informa- Corona Daily Independent March 14, 1941, 6; “C.I.O. tion about his background and his German descent, claiming that Wins Vote at North Ameri- can,” Bakersfi eld Californian, March 14, 1941, 2. 102 “Citrus Company Reached in Wharf land Tribune, August 21, Refuses Records,” Co- Walkout,” San 1940, 36. 100 “Air Parts Plant Threatened,” rona Daily Independent, Bernardino County Sun, New York Times, March 24, July 10, 1940, 1. March 1, 1941, 2. 105 NARA 1940 United 1941, 9; Circleville Herald, States Federal Census, March 24, 1941, 8. 103 Corona Daily Indepen- 104 “House to Quiz NLRB Place: Los Angeles, Los dent, Feb. 11, 1941, 1; Chiefs,” Oakland Tri- Angeles, California; Roll 101 “Business Units Face “Settle Strike,” Corona bune, Nov. 14, 1939, T627_404; Page 4B; Charges,” Oregonian, Daily Independent March 14; “Union Suit against Enumeration District Sep. 28, 1939, 16. 1, 1941, 3; “Settlement U.S. Judge Valid,” Oak- 60-166.

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both he and his parents were all born in New York even though only his mother was U.S.-born. He also gave false information on his income, understating his salary as $3,200 ($126,000 in 2010 dollars) when in fact it was $5,600 ($221,000 in 2010 dollars).106 Apart from such irregularities, Spreckels remained an un-ideological man in ideological times. At age 53, he resigned his directorate aft er eighteen months of service: “‘I feel that I can be of more benefi t both to myself and to the labor situation in general by acting as a labor relations consultant,’” he explained to one paper.107 As an independent consultant, he was eventually his own master. Aft er April 1941 he represented various employers in their relations with employees and labor unions. 106 Ibid.; Offi cial Register of the United States 1940, compiled by the United The history of the small consulting fi rm Walter P. Spreckels & As- States Civil Service Com- sociates is only a footnote in the business history of the Los Angeles mission (Washington, region, but he was involved in at least two important cases. As an 1940), 187. independent consultant, Walter’s fi rst appointment was as a labor 107 “Offi cial of Labor Board Resigns Post,” conciliator for Disney Studios. The AFL, speaking for the Screen San Bernardino County Cartoonists Guild, had claimed to represent a majority of employ- Sun 1941, April 18, 4; “Spreckels Quits Post,” ees of the studio, while the small Independent American Society of San Diego Union, April Screen Cartoonists represented the majority of these specialists.108 17, 1941, 4.

This was a typical struggle on industrial versus craft unionism with 108 “Strike Hits Walt Dis- the AFL representing the fi rst principle. Walter Spreckels urged an ney,” Panama City News- Herald, May 27, 1941, offi cial election governed by his former agency, the National Labor 6; “Disney Studio Faces Relations Board, but his intervention had little eff ect. Movie mogul Strike,” Star Times Advo- cate, May 27, 1941, 12. Walt Disney refused to accept the legitimacy of the AFL, but aft er a two-week shutdown was “cornered into accepting a settlement.” 109 Steven Watts, The Magic Kingdom: Walt Disney Spreckels’ engagement could not smooth the struggle. The studios and the American Way of were hit hard fi nancially and it is claimed that Walt Disney’s own Life (Columbia, 2001), 225 and passim. Disney personal attitudes towards labor changed aft er this confl ict.109 was himself a second- generation Canadian- American immigrant In another case in October 1941 Spreckels represented the metal man- entrepreneur. ufacturer Hercules Foundries, Inc., an important military supplier, in 110 “Race Bans in Hiring a complaint about racial prejudice. While most companies declared Denied,” Oakland Tri- that “there is no race discrimination in their hiring,” and that diff er- bune, Oct. 21, 1941, 50; “Racial Bans in War ences in hiring resulted from diff erent skills, Spreckels explained in Plants Charged,” Fresno the name of his client that the company employed a large number of Bee Republican, Oct. 21, 1941, 4; Kevin Allen African-Americans but that “white moulders said they would walk Leonhard, The Battle for out” if they were promoted.110 Spreckels was among very few who Los Angeles: Racial Ideo- logy and World War II engaged in discussions of race without expressing explicit prejudices. (Albuquerque, 2006), 44, 46. Walter worked as an “Industrial Relations Consultant” until at least 111 Labor Arbitration Reports 1958.111 He remained a freemason and occasionally gave public (1958), s.p.

SPIEKERMANN | WALTER P. SPRECKELS 279 lectures on topics of labor relations.112 He and his family moved to North Hollywood. Eventually his daughter left home to attend college and married.113 His son Walter Jr., for some time a rancher, lived with his parents until his early death in 1955. As a Democrat, he surely triggered political discussions with his parents who remained Re- publican voters.114 The Spreckels maintained some connections to Yonkers, namely to Miss Hubertine Wilke, a former member of the Community Service Commission.115 We do not know whether Walter took notice of a mistaken report of his death published in Yonkers in August 1961.116 He eventually moved to Laguna Hills, in Orange County, and died there, at the age of 88, on May 8, 1976.117 His wife survived him by 15 years and died in Los Angeles on July 5, 1991.118 Walter P. Spreckels is buried at Forest Lawn Memorial Park, Los Angeles, next to his son Walter Jr. and his wife Gertrude.119 As an immigrant entrepreneur, he was an ordinary man — nothing special, nothing grand. But a ﬁ nal look at his social life in Yonkers can perhaps demonstrate that he still tried to make a diff erence. 112 “ ‘Labor Relations’ Topic,” Santa Ana Register, August 24, 1942, 5. A Passion for the Community: Family Status 113 “Obituary,” Los Angeles and Social Networks Times, June 29, 1955. The men who were titans of industry in the early twentieth century of- 114 California Voter Registra- tions, 1900-1968, Los An- ten conducted their careers according to a gendered division of labor, geles County, 1946, Roll 69; devoting themselves to business issues and politics while their wives California Voter Registra- tions, 1900-1968, Los An- participated in cultural activities and society events. In the case of an geles County, 1954, Roll 97. ordinary executive and his wife, like Walter and Gertrude Spreckels, a

115 “Mrs. Walter Spreckels and diff erent pattern obtained. Like other middle-class American women, Daughter in City,” Yonkers Gertrude Spreckels was almost always referred to by her husband’s Statesman, July 15, 1946, 9; “Hubertine Wilke Leaves for name in newspaper accounts, as Mrs. Walter P. Spreckels, rather than Trip Across Country,” Yon- having her separate identity fully acknowledged. She participated in kers Herald Statesman, July 15, 1946, 9; “Miss Wilke a broad array of charitable and educational activities. For example, Returns from Paciﬁ c Cruise,” Gertrude Spreckels and Louis Spreckels’ wife Elizabeth Spreckels Yonkers Herald Statesman, 120 September 21, 1967, 11. helped organize an annual fair for Yonkers’ needy poor. Gertrude A. Spreckels attended meetings of the conservative Daughters of the 116 “Correction,” Yonkers Her- 121 ald Statesman, August 9, American Revolution, although she was probably not a member. 1961, 2. She also joined the city’s park and book clubs.122 117 California, Death Index, 1940–1997, Place Orange, Date 8 May 1976, Social Se- 119 Plot Sheltering Hills, 120 “Apple Orchard in 122 Yonkers Statesman, curity 130092989. Map C03, Lot 1005, Full Bloom,” Yonkers March 29, 1926, 2; Space 2 (Ancestry.com Statesman, March 31, “Women to Turn from 118 California Death Index, U.S., Find a Grave In- 1916. Social Activities to Day 1940–1997, Place Los dex, 1600s-Current (da- of Prayer,” Yonkers Angeles, Date 5 Jul 1991, tabase on-line), Provo, 121 Yonkers Statesman, Nov. Statesman, Feb. 20, Social Security 555217103. UT, USA). 16, 1924, 4. 1928, 5.

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Such engagement without a real focus was also typical for Walter — at least until the mid-1920s. He was an active tennis player and horseback rider, and he was also an ongoing supporter of the Federal Athletic Club, created by Federal Sugar’s employees, which was also actively backed by his cousin Louis.123 Many of the club’s teams were respected throughout the Yonkers area. For Walter, the social dimension of the club was surely important. He liked to attend the excursions and annual meetings that always featured jolly banquets, and spent two years as the club’s president.124 This probably gave him a feeling of acceptance by his American-born colleagues. At that time, he also developed closer connections to the local press, where he was no longer presented as an “alien enemy” but as one citizen among many.125

This feeling of having gained acceptance as an American probably 126 “Mayor Assures German enabled Spreckels to feel comfortable reengaging with his German Relief Workers,” Yonkers Statesman 1924, January identity in early 1924, when he became an active supporter of the 18, 1; “Big Mass Meeting Quakers’ campaign for hunger relief for German children suff ering to Open German Relief Drive Here,” Yonkers Sta- from the crisis caused by the hyperinfl ation of fall 1923. Spreckels tesman, Jan. 19, 1924; became a leader in a campaign that collected $25,000 ($1.57 million “German Drive Going Fine,” Yonkers Statesman, in 2010 dollars) in Yonkers, leading rallies at the Federal Sugar Refi n- Jan. 24, 1924, 2. ing Company and participating in other public events in both Yonkers 127 “Real Estate Board and New York City.126 Earlier, Spreckels had been active in the Yonkers Dines,” Yonkers States- man 1921, May 11, 1; Chamber of Commerce, and these public relations activities may have “New Building and Loan helped him feel comfortable later on his role as a public arbitrator in Company May Elimi- 127 nate Insurance Phase,” a high-profi le policy position. Yonkers Statesmen and News 1922, January 16, The most important chapter in the social life of Walter P. Spreckels, 3. Walter P. Spreckels also presided over the however, was his service on Yonkers’ Community Service Commis- Public Safety Committee sion, whose chair he became in summer 1926.128 This local institu- of the Yonkers Chamber of Commerce and was tion was an outcome of the U.S. recreation movement, which became among the Yonkers dele- formally organized in 1906, when the Playground Association of gates of the Westchester County Medical Society 129 America was founded. Its roots can be traced back to Germany (“10 Years Ago,” Herald Statesmen Yonkers 123 “Spreckles [sic] and Joe between these groups Club,” Yonkers States- 1934, May 14, 8; “10 O’Brien Win the Fed see Olivier Zunz, Making man, March 7, 1924, Years Ago,” Herald Sta- Doubles,” Yonkers Sta- America Corporate, 10; “Federal Athletic tesman Yonkers 1935, tesman and News, Sep. 1870-1920 (Chicago, Club to have Monster May 16, 8). 22, 1922, 10; Yonkers 1990), esp. 125–48. Carnival Here,” Yonkers Statesman, Sep 8, Statesman, April 30, 128 “30 Years Ago,” Her- 1927. Although led by 124 “‘We Will Revive the 1924, 12; “Federal Din- ald Statesman Yonkers, executives, the Federal Marathons in Yonkers,’ ner Tomorrow Night,” March 6, 1956, 4. Athletic Club was still Says Federal Leader at Yonkers Statesman, an institution to estab- Annual Dinner at the Feb. 5, 1926, 3; Yon- 129 Stephan Wassong, Play- lish a common identity Elks’ Club,” Yonkers Sta- kers Statesmen, Oct. 16, grounds und Spielplätze. among blue- and white- tesman and News, Dec. 1926, 2. Die Spielbewegung in den collar workers. For the 7, 1922, 10; “Many At- USA und in Deutschland increasing divisions tend the Annual Dinner 125 Yonkers Statesman, Oct. 1870-1930 (Aachen, in American society of the Federal Athletic 20, 1926, 7. 2007).

SPIEKERMANN | WALTER P. SPRECKELS 281 and England. Physical education was promoted by the German Turner movement and it was mostly German immigrants who established early playgrounds in Philadelphia, in New York, and in

130 Linnea M. Anderson, “‘The Chicago. Recreation was understood in the antique tradition of Playground of Today Is the humanistic education as a means of combining mental and physical Republic of Tomorrow’: Social Reform and Organized Recre- ﬁ tness. It was also promoted as an element of social reform. Build- ation in the USA, 1890-1930’s” ing playgrounds was like building characters for a democratic soci- in The Encyclopaedia of Informal 130 Education (2007), http:// ety of free and equal people. For Walter P. Spreckels, this was a infed.org/mobi/social-reform- reminder of the education he received at the Vitzthumsche Gymna- and-organized-recreation-in- the-usa/. sium in Dresden.

131 “Street Showers for Kiddies Yonkers was an industrial town, shaped by the Otis Elevator Company, Again,” Yonkers Statesman, July 8, 1926, 2. sugar reﬁ ning, textile and chemical industry. It was still growing with

132 “City School Yards Will Be 100,176 inhabitants in 1920 and 134,646 ten years later. But it lacked an Opened as Playgrounds, advanced social infrastructure. Spreckels and the commission exam- Spreckels States,” Yonkers Sta- tesman, July 23, 1926, 1. ined the local parks and asked for improvements to wading pools and for new utilities for public recreation.131 Band concerts were organized 133 “The Statesman Says---,” Yonkers Statesman, July 29, to popularize public parks. Spreckels decided to open Yonkers’ school- 1926, 1. yards as playgrounds, although this idea faced stiff criticism because 132 134 “Play Leaders Not in Politics, there could be damage to shrubbery and landscaping. Spreckels Says Spreckels,” Yonkers Sta- argued that most children are responsible and opted for a culture of tesman, March 26, 1929. trust in the younger ones.133 He also argued for closing certain streets 135 “Our Recreation Record,” Yon- to automobile traffi c in order to provide more space for play. Acting for kers Statesmen, Sep. 27, 1926, 6; “Appeals for Recreation,” the public beneﬁ t gave him moral authority: “We, who make up the Yonkers Statesman, Oct. 28, recreation commission . . . are not interested in gaining votes and we 1926, 1–2; “To Ask Transfer 134 of Surplus Funds,” Yonkers do not do our work for any reason other than a love of it.” Statesman, Dec. 24, 1926, 2; “Yonkers May Be Scene of Such activities were supported by public events, the mobilization of Canoe Races,” Yonkers States- man, Feb. 6, 1928. citizens, and an intense struggle for a larger budget for recreation.

136 “May Not Fill $3,500 Play- Spreckels managed to acquire signiﬁ cantly higher budgets, which al- ground Job,” Yonkers States- lowed not only the construction of new playgrounds but also supplies man, Dec. 30, 1926, 1; “Slate 135 Greening for Recreation Posi- such as canoes and handballs. The city of Yonkers established the tion Here,” Yonkers Statesman, new position of a director of Community Service Commission work — Jan. 22, 1927, 2; “Kennedy Makes Answer to Criticisms of Spreckels’ engagement was pro bono — and hired several new lead- Walter Spreckels,” Yonkers Sta- ers.136 Spreckels gave public talks on “The Recreation Problem of tesman, March 19, 1927, 1–2. Yonkers,” collected hundreds of signatures for the creation of a new 137 “North Yonkers Will Hear Talk playground and recreation center, and cooperated with youth organi- on Recreation,” Yonkers States- 137 man, Feb. 14, 1927, 2; Yonkers zations to reach his goals. At the end, he had initiated “the biggest Statesmen, August 3, 1926, 3. recreation program in the history of Yonkers,” based on a mixture of 138 138 “W alsh Praised in Play Report,” civic duty and social hygiene. Yonkers Statesman, Jan. 9, 1928, 16. The quote is from Spreckels’ It was a kind of redemption that in 1926 Walter P. Spreckels, the 24-page report on the commission’s work in 1927. former “alien enemy,” was appointed to head his town’s Fourth of

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July celebrations.139 He chaired this committee in 1927 as well and was a member of the committee until 1928.140 The unraveling of his career at Federal Sugar cut short his participation in these community projects, and in July 1929, aft er he had already lost the presidency of the Syrup Products Company, Spreckels offi cially resigned as chairman of the Community Service Commission and “expressed regret that his personal aff airs made it impossible for him to serve longer.”141 Spreckels never took a civic offi ce again.

Conclusion The Titans once ruled — if you trust Greek mythology — during the Golden Age. But these immortal giants were beaten and the Ages of Man followed. Walter Spreckels was a representative of the end of the age of private capitalism in the U.S., which lasted longer in immigrant circles than in mainstream business. He was one of those managers business historian Alfred D. Chandler, Jr. once praised and analyzed when he defined the modern business enterprise as “the most powerful institution in the American economy and its managers the most infl uential group of economic decision makers.”142 The biography of Walter P. Spreckels, however, off ers a less majestic perspective on “managerial capitalism.” As an executive of one of the largest fi rms in the sugar business, he was not able to deal with the erup- tions caused by the changes in tariff politics, which hit independent producers even before the Great Depression. Walter P. Spreckels also fell afoul of Prohibition enforcement, though his direct responsibility remains unclear. Pushed out of his business, he found a new task in negotiating the fractures of capitalism. He acted for labor and for 139 “Spreckels to Head the capital, and appealed to common sense. This mirrored his public July 4th Committee,” Yon- kers Statesman, June 10, service in the 1920s when he was active in creating a better Yonkers, 1927, 2. merging ideas from Germany with the necessities of American in- 140 “Forgarty Names Com- dustrial towns. mittee for Fourth Pro- gram,” Yonkers States- Thrown into the U.S. by his father’s criminal deeds and bankruptcy, man, June 25, 1927, 2; “Mayor Names July 4 Walter P. Spreckels cut himself off from his German roots aft er Group,” Yonkers States- he was marked as an “alien enemy” in World War I. It took some man, June 12, 1928, 5. time, but he fi nally became an ordinary American citizen. Aft er his 141 “Kinsley Named,” Yon- indictment and the Depression-era failure of his company, he saved kers Statesman, August 1, 1929, 1. himself and his family fi rst by joining the government, and then as a private consultant. Walter P. Spreckels, who learned about ancient 142 Alfred D. Chandler, Jr., The Visible Hand: The mythology in his youth, knew that the Golden Age of the Titans, once Managerial Revolution in extolled by Hesiod and Ovid, was followed by the Iron Age, a world American Business, 15th ed. (Cambridge, 1999 at war with itself. [1977]), 1.

SPIEKERMANN | WALTER P. SPRECKELS 283 Uwe Spiekermann is a Privatdozent at the Georg-August-University of Göttingen. He was a deputy director of the German Historical Institute Washington DC from 2008-2015, and a general editor of the Immigrant Entrepreneurship Project. He has held teaching and research positions in Bremen, London, Exeter, Münster, and Vienna, and he also served as the managing director of a Heidelberg-based foundation for healthy nutrition. His work focuses on the economic and social history of Germany and the United States in the nineteenth and twentieth centuries, the history of consumption, marketing, nutrition, and the history of science and knowledge. Spiekermann is currently writing a family biography of the Spreckels family, better known as the “Sugar Kings” of the American West.

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BUILDER OF THE LIBERAL CONSENSUS: HENRY J. KAISER (1882-1967)

Tim Schanetzky

In the summer of 1944, Franklin D. Roosevelt was preparing to run for his fourth term as president, and his closest advisors were puzzling over a possible successor to Vice-President Henry Wallace. One possible candidate stood out: Henry J. Kaiser.1 The entrepreneur had no political experience, did not belong to a party, and had not supported any campaign ﬁ nancially — and yet the President contemplated sending him into the race as his running mate. In a specially prepared dos- sier, the FBI painted the picture of a climber at the height of his career. Kaiser’s conglomerate employed 250,000 workers: they extracted coal and ore, produced cement, steel, and magnesium, and built roads, dams, ports, cargo ships, airplanes, and munitions. Many of these businesses were not even ﬁ ve years old. Kaiser was not only one of the largest employers in the U.S., he was also considered one of the most enlightened, off ering health insurance and housing construction schemes, and cooperating closely with the unions; his reputation was exemplary. Yet Roosevelt did not include the entrepreneur on his list 1 “Now It’s Kaiser for Presi- of possible vice-presidents because of his economic stature. Rather, dent,” news clipping, Feb. at a time of large, manager-led enterprises, Kaiser embodied a new 17, 1944, carton 257, folder 13, Henry J. Kaiser version of the American Dream: with hard work and energy, anyone Papers, Bancroft Library, could make it on his own.2 Yet just a short time later, the tide turned. University of California at Berkeley, Berkeley, Calif. In the end, Harry S. Truman became Roosevelt’s running mate and Subsequent references will be in the form HJKP, car- already by the late fall of 1944, when it was becoming ever more clear ton number/folder num- that military victory in World War II was merely a matter of time, ber. See also Stephen B. Adams, Mr. Kaiser Goes to Kaiser was suddenly portrayed as an economic opportunist who had Washington: The Rise of a only achieved his position in life thanks to government support. From Government Entrepreneur (Chapel Hill, 1997), 152– then on, his opponents accused the entrepreneur of having enriched 55; Mark S. Foster, Henry himself at the expense of the general public. Although Kaiser was still J. Kaiser: Builder in the Modern American West active in business for many years aft er, right up to his death he had (Austin, 1989), 118–19. to defend himself against such charges. As late as the spring of 1964, 2 J. Edgar Hoover to Samuel the East Coast political establishment was unwilling to relent: an at- Rosenman, June 30, 1944, tempt by several Congressmen to honor the then eighty-two-year-old and enclosed “Report on Kaiser,” Federal Bureau Kaiser, the builder of the famous “Liberty Ships,” with a Congressional of Investigation Records, Medal of Honor failed miserably. During the debate, the Republican Freedom of Information Act request. Harold R. Gross from Iowa summed up the reservations: “I question whether this gentleman is an industrial giant on the basis of having 3 110 Cong. Rec., 11124–37 (May 18, 1964), quote on hewed it out himself, as have other leaders of industry in this country.”3 p. 11125.

SCHANETZKY | HENRY J. KAISER 285 Family Background Although Kaiser was born in the United States, he grew up in a milieu dominated by German immigrants. His father Franz (later Frank, born 1842, died October 18, 1929) hailed from Steinheim in Hesse, a small medieval town on the southern banks of the Main that is today a suburb of Hanau. While we know nothing about the reasons that persuaded the thirty-year-old shoemaker to emigrate in 1872, he drew upon contacts from his homeland for his new start in America. Frank Kaiser traveled to a small hamlet in upstate New York called Canajoharie where he was taken in by the Yops (originally Jobst) family, farmers who had also come from Steinheim, and he eked out a living with odd jobs. His hosts had given up their heavily indebted holding in Germany as early as 1853 and had man- Figure 1: The Liberty Ship aged to acquire a mid-sized farm in this village in upstate New York. Patrick Henry. Courtesy of Frank Kaiser fell in love with Mary Yops (originally Anna Marie; born the Library of Congress. 1847, died December 1, 1899) and married her on January 5, 1873. The couple settled a few miles from Canajoharie, in Sprout Brook, where Frank opened a cobbler’s workshop. Aft er three daughters (Elizabeth, born November 23, 1873; Anna, born October 23, 1876; and Augusta, born September 19, 1878), Mary gave birth to a son on May 9, 1882, who was given a Protestant baptism two years later with the name Heinrich Kaiser. The baptismal register has no indication of the second name “John,” which Kaiser must have adopted on his own later, just as he changed “Heinrich” into “Henry.”4

When the entrepreneur became a national celebrity in 1942, many journalists, in order to create a striking contrast, described the down- right impoverished circumstances in which Kaiser had supposedly grown up. By contrast, the family tradition emphasized that the family’s circumstances, while admittedly simple, had been characterized 4 HJKP, 258/31, Parish Reg- isters of St. John’s Lutheran by his parents’ irreproachable ethic of hard work. It is unlikely that Church, Canajoharie, Kaiser’s father was able to make a living in the tiny settlement of undated; Henry J. Kaiser Company, “Facts in Brief Sprout Book, and in 1889, no doubt for economic reasons, the fam- about Henry J. Kaiser,” 1946, ily moved west to Whitesboro, a prosperous town near Utica on the 43–46; Foster, Henry J. Kaiser, 7–9. Erie Canal of nearly 1,600 residents. Whether his father continued

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to work as a tradesman there or found employment in an industrial enterprise cannot be determined with certainty. Kaiser, at any rate, seems to have had closer ties to his mother, who died early, and to his three older sisters. The fact that he left school at age thirteen without a diploma probably says something about the family’s ﬁ - nancial situation.

There are no indications from any element of Kaiser’s career that his German origins were important to him. How early his family’s assimilation was completed is underscored by the quick change of his fi rst name. Although it can no longer be dated precisely, it must have occurred long before World War I. In 1943, Kaiser’s oldest sister recalled that in her childhood she never ate a meal without saying a prayer, and as the fi rst-born she oft en had to lead the benediction — initially in German, but soon in English. Though his father was Catholic, Kaiser was raised in his mother’s Protestant faith. In Sprout Brook, he attended services at the Methodist Church; later he became a member of the Presbyterian Church, and in 1939 he was confi rmed by the Episcopal Church, in which he served as a lay reader.5

What is clear is that Kaiser’s family endowed him with an irrepress- ible drive to achieve. He found his ﬁ rst job on his own, working as an errand boy at the J. B. Wells Dry Goods Store in Utica. In his spare time, he furthered his business education through a correspondence course. At sixteen he changed jobs. Between 1898 and 1900, Kaiser worked at three photography studios in Utica and Cortland. He learned the craft of taking photographs and then became a traveling salesman for Eastman Kodak products. In 1901, he seized the chance to become the owner of a photography studio in the Adirondacks resort town of Lake Placid. The rising vacation destination evidently off ered suffi cient income possibilities for rapid expansion: over the next four years, Kaiser opened four more shops in Florida, in Daytona Beach, Jacksonville, St. Augustine, and Palm Beach.6

Florida not only made his business independent of the short tourist season in Lake Placid, it was also the place where he met his future wife. His engagement to Bess Fosburgh (born April 9, 1886, died March 14, 1951), the only daughter of a wealthy timber merchant from a family of English ancestry, gave his career a decisive turn. 5 Albert P. Heiner, Henry J. His ﬁ ancée had enjoyed a much broader formal education at East Kaiser, American Empire Builder: An Insider’s View Coast boarding schools and as a music student than the energetic (New York, 1989), 2–8. salesman. That was probably also one reason why his future father- 6 Foster, Henry J. Kaiser, in-law insisted that he ﬁ nd something more solid than photography 11–14.

SCHANETZKY | HENRY J. KAISER 287 and demanded that Kaiser build a house for his family and show assets of $1,000 (or $24,000 in 2010 dollars) and a monthly income of $125 (or $3,000) before the wedding occurred.7 Giving up his photography business, Kaiser headed west and moved to the booming city of Spokane, Washington. There he quickly earned great respect as a salesman with McGowan Bros. Hardware Company and met the challenges of his future father-in-law within ten months. The couple married on April 8, 1907, in Boston. Over the next seven years Kaiser changed jobs three more times, sold construction material, tools, and machines, and learned to manage projects in civil engineering and road construction. This on-the-job-training came to an end in 1914 when his employer went bankrupt and Kaiser continued the construction of a road in Vancouver, British Columbia, at his own risk. A local bank provided him with the necessary working capital and thus made possible the founding of the Henry J. Kaiser Company, Ltd.8

Paving Roads and Building Hoover Dam Kaiser built roads. In the still largely undeveloped Pacifi c Northwest, in northern California, and in western Canada, the need was great, and already with the Federal Aid Road Act of 1916 it was foreseeable that the expansion of a highway network would generate projects for years to come.9 In the subsequent years, Kaiser developed his entrepreneurial style: nearly all of his construction projects were state or local contracts, and he prevailed in competitive bidding processes. Needless to say, the government client’s engineers examined every 7 Here and subsequently, the 2010 dollar equivalents are bid. Therefore, the art of successful competition lay in drawing up given to provide a better sense of the scale of the business, realistic plans, submitting more favorable bids than the competi- notwithstanding methodolog- tion, and eventually building the project at less cost than originally ical problems. The basis is the trend in the Consumer Price projected. Since the contracts had to be carried out at a fi xed price, Index, see http://www. Kaiser bore the business risk. If there were any unexpected diffi cul- measuringworth.com/ uscompare/. ties, such as geological or logistical problems, he lost money. But if he could build more quickly and less expensively than anticipated, 8 Foster, Henry J. Kaiser, 18–21; 10 HJKP, 258/28, “Chronology the project would generate profi t. These incentives prompted a of Bess Kaiser’s Early Life,” search for more effi cient methods at every stage of the construction undated. project, including planning and risk assessment, the extraction of 9 Bruce E. Seely, Building the raw materials, the transport of materials and the logistics this en- American Highway System: Engineers as Policy Makers tailed, and the use of machines. It also paid to assemble a permanent (Philadelphia, 1987). cadre of qualifi ed workers. Kaiser soon fell back on the experience 10 See for example HJKP, of a team of construction foremen and engineers who would be part 276/21, “Agreement Kaiser of his closest circle of leadership for decades. Kaiser soon earned a and City of Vancouver,” Jan. 12, 1914. reputation in the region for completing his projects on time and doing

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good-quality work at the agreed-upon price. He understood early on that every single project was important to his reputation among the public-sector clients.

During the fi rst seven years, Kaiser’s crews built roads with a total value of about $2.8 million (or $34.1 million in 2010 dollars). At fi rst, smaller projects — the value of which rarely exceeded a quarter of a million dollars — predominated. This changed at the beginning of the 1920s, when the company began winning a continuous stream of million-dollar projects and the focal point of its operations shift ed permanently to California.11 Kaiser’s family — now including two sons, Edgar Fosburgh (born July 29th, 1908, died December 11th, 1981) and Henry John, Jr. (born February 18th, 1917, died May 3rd, 1961) — moved to Oakland.12 A small company headquarters was set up there for the fi rst time, and the company’s structure also began to solidify: Kaiser pursued a backwards integration strategy and began operating his own gravel and sand pits. At the end of the decade he began to build concrete mixing plants in the Bay Area, supplying them with his own raw materials. He became involved in professional organizations, and in 1924 he began a two-year term as president of the Contractors Association of Northern California. He also launched his fi rst joint ventures with Warren Brothers of Massachusetts, a fi rm that had been supporting Kaiser with capital contributions and know-how since 1914. In California, an equally friendly relationship soon developed with Warren A. Bechtel (1872-1933), a descendant of German immigrants who by this time had laid the foundation for the largest construction company in the United States.13

Setting up these joint ventures became customary among most of the family-led construction companies because projects oft en required a variety of specialized skills that no single company could off er. In addition, this organizational setup accorded with Kaiser’s temperament: throughout his career, he was involved in cooperative projects. It suited him to mediate between competing interests and to work toward accommodation as a moderator. The ﬁ rst major test came in the spring of 1927, when Ralph Warren invited Kaiser into a 11 Kaiser Company, “Facts in consortium to build 750 miles of highways and 400 bridges in Cuba Brief,” 45. over the following three years. For Kaiser, the $20-million project 12 HJKP, 258/20, c.v. of ($251 million in 2010 dollars) was an opportunity to prove himself Henry Kaiser, Jr.; HJKP, once and for all within the circle of the established competition. It 258/29, biographical sketch of Edgar F. Kaiser, was not long before these allies invited him into a new consortium both undated. that was planning to bid on the construction of the Boulder Dam 13 Foster, Henry J. Kaiser, (renamed Hoover Dam in 1947). 30, 38.

SCHANETZKY | HENRY J. KAISER 289 The consortium, which came to be known as the Six Companies, won the bid on March 4, 1931, and Kaiser once again knew how to take advantage of the opportunities offered by this risky project. The construction would clearly be complicated and potentially dangerous: a dam had to be built that required more concrete than all the other dams commissioned by the federal Bureau of Reclamation combined; the Colorado River had to be temporarily rerouted, and four diversion tunnels had to be blasted into the walls of the gorge — and all of this in the desert without existing infrastructure. Kaiser advanced quickly to the leadership of the Six Companies’ Executive Committee, and he also represented the consortium in its external dealings.14 Although the Hoover administration launched the prestigious project, when Franklin D. Roosevelt became president in 1933 he promised to take more active steps against the economic crisis, and

Figure 2: Hoover Dam, this entailed larger investments in public in- view from above by Tim frastructure. Therein lay the largest opportunity: whoever succeeded Schanetzky. Courtesy of on the Hoover Dam project could count on follow-up contracts.15 His Tim Schanetzy. proﬁ le also increased as he became vice-president in 1932 and then president, in 1933, of the Associated General Contractors, the national industry association.16

The power-conscious Kaiser played a major role in the creation of an advantageous division of labor among the consortium partners. On future projects, one entrepreneur always took the lead — for the most part because his workers had special expertise. This man was called the sponsor, and he asked all the other partners whether they wanted to join in. He paid the highest share of the ﬁ nancing. Once this was 14 Resolution, May 31, 1931, in vol. 1, Six Companies assured, the sponsor alone calculated the bid. If it was successful, Records, Bancroft Library. he assumed full responsibility for its implementation. He requested

15 Frank J. Taylor, “Builder No. the funds from his partners, but was solely in charge of carrying out 1,” Saturday Evening Post, the project. The sponsor could borrow highly experienced experts June 7, 1941, 9+. from his partner companies, and they could provide machinery and 16 HJKP, 256/28, “Awards, other equipment for a fee. This system could function only if there Honors, Tributes, Citations,” undated. was reciprocal trust and a certain congruence of interests. It was

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successful because the sponsor alone oversaw the implementation of the projects, eliminating complicated decision-making processes — an organizational form that was well suited to the decision-making problems at major construction sites: “Each day brings new problems, each generally requiring an immediate decision,” a longtime Kaiser construction manager explained.17

Making New Deal Business The Six Companies completed the Hoover Dam two years ahead of schedule, and as part of the consortium, Kaiser subsequently participated in several prestigious New Deal projects: dams in Bonneville, Grand Coulee, and Shasta, bridges and tunnels in California and New York, ports and jetties along the Paciﬁ c. These government contracts led to the paradoxical picture that Kaiser’s businesses prospered during the grim years of the Great Depression, and with typical entrepreneurial opportunism, he did everything he could to make himself appear in the best light to his clients. This is especially evident in Kaiser’s change of course on social and union politics in the middle of the 1930s.

No matter how successful the construction of the Hoover Dam may have been in technical terms, the young reformers in the Roosevelt 17 Christopher J. Tassava, administration felt that the way it had been carried out was scan- “Multiples of Six: The Six Companies and West dalous. In their eyes, the price paid in blood by the workers and Coast Industrialization, the stubbornness of the construction companies when it came to 1930–1945,” Enterprise & Society 1 (2003): 1–27; management policies weighed heavily. Offi cially, ninety-six work- Donald E. Wolf, Big Dams and Other Dreams: The Six ers died during the fi ve years of construction on the dam. The real Companies Story (Norman, number was far higher and can no longer be determined, since a 1996), 34–59; quotation: HJKP, 299; T.M. Price, The fatal workplace accident was reported only if the victim was killed Henry J. Kaiser Company, directly on the job. To save money, the consortium used machines c. 1950. with combustion engines during tunnel work, but many workers 18 Joseph E. Stevens, Hoover who fell victim to heat exhaustion and carbon monoxide poisoning Dam: An American Adven- ture (Norman, 1988), 60– died hours aft er collapsing, not at the worksite itself. To critics it 65; Andrew J. Dunar and was obvious that they had fallen victim to the time pressure under Dennis McBride, Building Hoover Dam: An Oral His- 18 which the Six Companies were working. The fact that Kaiser and the tory of the Great Depres- other consortium partners had massively violated work-hour rules sion (New York, 1993), 36, 42, 100. fi t into this picture, as did their unyielding dealings with the unions. Private security offi cers quickly set up a system of informants at the 19 Michael A. Hiltzik, Colos- sus: Hoover Dam and the construction sites to counteract the organizational eff orts of the radi- Making of the American cal Industrial Workers of the World (IWW). More than 1,000 workers Century (New York, 2010), 354–58; Stevens, Hoover ended up being blacklisted. Following a failed strike, they were fi red.19 Dam, 154–56.

SCHANETZKY | HENRY J. KAISER 291 Although the task of overseeing the operations of the construction site was not in Kaiser’s hands, he did go along with the decisions of his partners, and even beyond the prestigious project on the Colo- rado, Kaiser did not stand out with any special commitment to social policies until the middle of the 1930s. He met the minimum legal requirements of the respective states, but when it came to health insurance, for example, he did only what was absolutely necessary. But with the creation of Social Security, the passage of the Wagner Act in the summer of 1935, and Roosevelt’s anti-business reelection campaign the following year, it must have become very clear to Kaiser that the conditions of successfully running a business were fundamentally changing — at least for companies entirely dependent on government contracts, as he was. It was therefore no doubt largely due to the changing political climate that Kaiser was eager henceforth to have harmonious relations with the unions and soon agreed to sign closed-shop agreements.20

It was characteristic of Kaiser that he accepted such circumstances and not only accommodated himself to them, but soon realized the advantages of the new course. Already during the construction of the Grand Coulee Dam he began to set up a corporate health insurance. His oldest son Edgar was able to enlist a doctor named Sidney R. Garfi eld to provide medical care for the workers and their families in remote Grand Coulee. Garfi eld had previously developed a business model at two similar construction projects in the wilderness, and it proved a worthwhile expense at Grand Coulee: while the employer assumed the majority of the costs for establishing a small hospital, the workers paid a fi xed monthly fee in advance. Workers now went to the doctor more oft en and especially at the earlier stage of an illness, since they no longer had to worry about possible additional expenses. This accorded with the interest of the doctors in keeping control of treatment costs. As much as possible, they wanted to prevent serious illnesses that entailed especially expensive treatments. These fi nancial incentives also led Garfi eld to commit himself to better job safety at the construction sites and to training workers in accident preven- tion. As the Kaiser company expanded — a development inextricably linked with World War II — Kaiser developed the prepaid health care

20 For example, HJKP, 4/1, plan into the nucleus of a separate business. Aft er the war, and still “Agreement on Ruby Dam,” under the leadership of Garﬁ eld, the sector then grew even larger Oct. 22, 1937; see also Rickey Hendricks, A Model for Natio- thanks to cooperation with the unions, whose members streamed nal Health Care. The History into the Kaiser Permanente Medical Care Program. By 1955, only of Kaiser Permanente (New Brunswick, 1993). ﬁ ve percent of the program’s clients were Kaiser employees. By then

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Kaiser was so convinced of the merit of “his” health program that he recommended it to progressive politicians as a model. Especially because of its ﬁ nancial incentives, he argued that it was preferable to proposals for government-sponsored health insurance.21

Strategies of Success Until 1940, Kaiser was active chiefl y as a builder who was also involved in the sale of ready-mix concrete and the production of raw materials such as sand, gravel, or cement. The United States’ slow turn away from isolationism, however, and above all its support for its European allies, created opportunities for business expansion even before the launch of wartime production as such. The Kaiser company’s fi rst military projects were in shipbuilding, but it soon became involved in machine building and extracting magnesium as a lightweight alloy. His engineers built blast furnaces, steel works, and rolling mills on the West Coast. Kaiser factories made airplane parts, bombs, and munitions. This surging growth refl ects the general economic development in the United States: in the fi rst half of 1942 alone, state and military agencies awarded contracts totaling 100 billion dollars (or $1,340 billion in 2010 dollars), and it was only the military spending that put an end to the Great Depression.22 Against this background, Kaiser has very aptly been called a “government entrepreneur,” since the methods of his success reveal a good deal about the relationship between the state and the private sector during the New Deal and World War II.23

Three strategies for success explain the course of his expansion. First, Kaiser was superbly prepared for the opportunities of a state- managed economy, because throughout his entire career he was ac- 21 By the end of 1955: Fos- tive in a political and bureaucratic marketplace. The circumstances ter, Henry J. Kaiser, 224; Hendricks, A Model for rewarded experienced lobbyists, and he clearly was that. Kaiser hired National Health Care, erstwhile Roosevelt conﬁ dant Thomas G. Corcoran (1900-1981) and 142–62. attorney Charles F. Calhoun to lobby on his behalf in Washington, but 22 David M. Kennedy, Freedom he also succeded in establishing important personal connections on From Fear: The American People in Depression and 24 his own and spent a good deal of time there. His genial disposition War, 1929–1945 (Oxford, and talent for salesmanship were also helpful. Sometimes he was 1999), 626. aided by remarkable coincidences, such as his oldest son, Edgar, 23 Adams, Mr. Kaiser Goes to falling in love with and marrying (in 1932) the daughter of Elwood Washington, 3–13.

Mead, the longtime head of the Bureau of Reclamation. 24 “Memo: Corcoran and Magnesium,” undated, box More important, though, was the second strategy of success: speed. 157, Thomas Corcoran Papers, Library of Con- While the size of the contracts grew over time, Kaiser operated on gress, Washington, DC.

SCHANETZKY | HENRY J. KAISER 293 the same model he had used in his ﬁ rst road projects. The art lay in drawing up realistic plans, submitting more favorable bids than the competition, and eventually building the project more quickly and effi ciently than originally planned. “Progress Charts” provided continuous feedback on whether the project was on track — in internal communications, speed was therefore also an important yardstick for the success of a project.25 Higher speed meant rising proﬁ ts, and it was to Kaiser’s great advantage that this accorded precisely with the logic of war production.

To this day, Kaiser’s prominence is largely due to shipbuilding. Here, too, profi t was directly tied to speed, since the contracts included completion bonuses.26 In addition, government procurement contracts facilitated the company’s growth through vertical integration. As an operator of shipyards, Kaiser immediately acquired a stake in the relevant supply industry. This alone explains one of his greatest successes: over the opposition of “Big Steel,” Kaiser was able to build a smelting complex in Fontana (east of Los Angeles) that soon supplied the sheet steel required for shipbuilding. Kaiser fi nanced the building of Fontana with a loan from the Reconstruction Finance Corporation (RFC), but without the secure profi ts from the shipyards, this course of expansion would have been unthinkable. In addition to the smelting works, a part of the earnings of the shipyard served as collateral. In his highly unprofi table magnesium adventure, as well, he relied on the income from his shipyards, whose aft er-tax profi t was reckoned at nearly 95 million dollars in 1946 (or $1.06 billion in 2010 dollars).27

In other words, only the great speed at which Kaiser built ships pro-

25 HJKP, 269/15, “Construction vided him with the fi nancial resources to expand into other sectors of Program for Boulder Canyon the arms industry — and to do so by making use of his third strategy Project,” June 10, 1933. of success: that of the outsider. Kaiser had experienced the eff ective- 26 HJKP, 136/26, “Profi t & Loss: ness of this strategy for the fi rst time when he suff ered an unexpected Maritime Shipbuilding Divi- sion,” May 31, 1945. setback in the wake of many successful bids. The Six Companies narrowly lost out on building the Shasta Dam on the Sacramento 27 Data: Hearings before the Committee on the Merchant River. But since the delivery of sand, gravel, and concrete was put Marine and Fisheries, House of out to bid separately, Kaiser applied to supply these — although Representatives, 79th Cong., 2nd sess., Sept. 23–26, 1946 the cement plant he intended to build was still in the late stages of (hereaft er Merchant Marine planning; the Secretary of the Interior, Harold Ickes, also signaled Hearings), p. 418, table: “Ad- justed summaries of shipyard his political backing. Kaiser knew that public clients had been suf- income to May 31, 1946”; fering for years from price fi xing in the cement industry, and his bid “Memo: Corcoran,” box 496, Corcoran Papers. was several million dollars below the price that the cement factories

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in Northern California had colluded to charge — even though their capacities were utilized at only sixty percent. Kaiser was awarded the contract, but this meant that he had to set up a cement plant at the Permanente Creek near Palo Alto posthaste, a plant whose long- term market prospects were uncertain. For fi ve years it had a secure market for its output thanks to the dam’s construction, and additional contracts soon materialized as naval infrastructure expanded. Kaiser also managed to circumvent opposition from his competitors: when the Southern Pacifi c Railroad, under infl uence from the cement cartel, suddenly refused to transport sand and gravel to the remote construction site and also blocked a private feeder track, Kaiser simply had a 9.5-mile long conveyor belt built.28

In a political environment in which reservations about big industry converged with the conviction that money should play no role in the arms buildup, the outsider strategy was unquestionably promising. Government contracts enabled Kaiser to disrupt oligopolies in magnesium and steel using tactics similar to those he had used in the 28 HJKP, 299, Alma cement industry. With ever greater frequency, government agencies Lindbergh, “History to 1946, Cadman Work complaining to Kaiser about supply bottlenecks aroused his interest Copy,” undated; Kaiser to in becoming involved in new sectors. In response, Kaiser engineers Walter, Jan. 3, 1939, Department of the Interior priced projects in copper, nickel, and tin production, as well as in to Kaiser, May 22, 1939, the synthesization of rubber.29 None of these schemes came to frui- Bureau of Reclamation to Kaiser, May 10, 1939, and tion, but procurement bureaucrats used the threat of the outsider to Ickes to Kaiser, Aug. 10, prod companies into relenting in price negotiations. Kaiser became 1939, all in HJKP 4/20; HJKP 4/4, Bureau of Rec- known as a “One-Man Trust Buster”; his outsider strategy consisted lamation press release, c. Aug. 2, 1939; HJKP of allowing himself willingly to be instrumentalized by government 3/29, Lindbergh to Kaiser, agencies.30 Little wonder that established business owners grew to March 7, 1938; “The Earth Movers,” Fortune, August resent him. 1943.

29 HJKP, 136/32, Calhoun to Liberty Ships Trefethen, Oct. 26, 1942; HJKP, 136/34, Calhoun During the war, Kaiser’s shipyards built 1,490 ships with a con- to Trefethen, c. August $ 1942; HJKP, 136/35, tract volume of more than fi ve billion dollars ( 55.8 billion in 2010 “Design, Construction and dollars).31 Not only was this business fi nancially profi table, it also Operation of Synthetic Rubber Plants,” Jan. 19, catapulted the entrepreneur into the center of public attention. At 1942, and RFC to Kaiser, the end of 1940, Kaiser had entered the building of cargo ships as an Feb. 7, 1942. outsider. His fi rst clients came from the United Kingdom: although 30 HJKP, 259/12, “He’s the U.S. had long since begun to prepare itself militarily for war, until Become a One-Man Trust Buster,” undated news the disaster of Pearl Harbor in the following year it remained formally clipping. neutral. Aft er the defeat of France and at the height of the Battle of 31 Data: Merchant Marine Britain, logistical support for the desperate British war eff ort stood at Hearings, 418.

SCHANETZKY | HENRY J. KAISER 295 the center of the American strategy, and transport across the Atlantic would remain important for years to come. The situation was so grave that the U.S. Maritime Commission was willing to make it possible for technologically inexperienced companies like Kaiser to get involved in building ships to a speciﬁ ed design known as “Liberty Ships.” That Henry Kaiser seemed to conjure shipyards in Richmond, California, Portland, Oregon, and Vancouver, Washington into existence, prac- tically out of thin air, overnight, was a public impression that the company never dispelled. In reality, experienced shipbuilders and a core of skilled workers had lent substantial support to Kaiser’s men.32

The United States’ entry into the war in December 1941 turned the “Liberty Ships” into a symbol for the Allied war eff orts, the success of which was by no means evident in the fi rst year of the war. The German “tonnage war” was aimed precisely at strangling Britain’s supply chains across the Atlantic, and with success: over the course of 1942, German submarines were able to send more tonnage to the bottom of the ocean than the shipyards could build new.33 This was a huge shock for the United States. The U.S. Maritime Commission expanded its shipbuilding program accordingly, and even more importantly, more cargo ships were to be built within a shorter period of time. While the construction of the fi rst “Liberty Ship” had taken 244 days, the average construction time soon dropped to forty days thanks to new welding techniques and a modular building method. In this general race to rationalize, Kaiser sharpened his profi le with two propaganda actions: in Portland, the workers laid the keel of the Joseph N. Teal on September 13, 1942. Ten days later, the ship was launched in the presence of President Roosevelt. A few weeks later, the workers in Richmond were able to weld the Robert E. Peary together in only four-and-a-half days.34

What was really an economic calculation — namely, to produce more rationally — was now considered by the American public 32 HJKP, 288/3, Alyce M. Kramer “The Story of the as a patriotic act. In the summer of 1942, Kaiser went public with Richmond Shipyards,” a bold plan that made his determination known to everyone. If typescript, 1945, 10–11. German submarines were sinking the American ships too quickly, 33 Kennedy, Freedom from Fear, cargo planes should be developed and built in large numbers going 564–72. forward — in his shipyards. Though the cargo plane proposal strikes 34 Kevin Starr, Embattled one today as bizarre, it caused great excitement in Washington. Not Dreams: California in War and Peace, 1940–1950 only was Kaiser’s idea seriously discussed politically, it also set off a (Oxford, 2002), 147; Adams, broad debate in the press that sought to hold the ineffi ciency of the Mr. Kaiser Goes to Washing- ton, 112–13. administrative bureaucracy responsible for the military’s failures. The

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dynamism of free market enterprise was contrasted to the military as a superior organizational principle, and Henry Luce’s publications Time, Life, and Fortune promoted Kaiser as a heroic ﬁ gure.35 Despite government subsidies, the cargo plane plan led to nothing, and a frustrated Kaiser soon also backed out of a joint venture with the erratic Howard Hughes

None of this diminished Kaiser’s popularity. Though rhetorically untrained and more persuasive as a salesman in a small circle, the entrepreneur now became a sought-aft er speaker. While he had delivered only three notable speeches in 1940–41, in 1942 that number rose to fourteen, and between 1943 and 1945 he gave some eighty-eight addresses. His popularity was probably also derived from the fact that shipbuilding was so well suited to homefront propaganda: launches provided attractive pictures, as did the welders’ showers of sparks and the assembly of pre-fabricated ship modules. In addition, the shipyards symbolized the war eff orts of American civil society. Within months, more than 100,000 new workers had fl ocked to Richmond, among them many who had been suff ering for two decades from harsh rural poverty. This “second Gold Rush” was reminiscent of frontier days: some workers’ families lived out in the open or in provisional tent cities, and thousands of women were working in industry for the fi rst time.36 The emblematic “We can do it” of the offi cial campaign around the propaganda icon “Rosie the Riveter” thus certainly captured one dimension of the reality of work 35 Adams, Mr. Kaiser Goes to Washington, 107–18; in the Kaiser shipyards. The shipyards themselves experimented 123–44. with similar campaigns, though they wanted to place more modern 36 Marilynn S. Johnson, The technology front and center; the result was the propaganda fi gure Second Gold Rush. Oakland 37 and the East Bay in World “Wendy the Welder.” War II (Berkeley, 1993), 30–59; Paul Rhode, “California in the Second Kaiser the Pacemaker World War: An Analysis of Defense Spending,” in In general, Kaiser had a talent for undertaking the right symbolic The Way We Really Were. The Golden State in the actions and complementing them with a suitable narrative about Second Great War, ed. himself. In a period defi ned by complex, multilayer corporate bureau- Roger W. Lotchin (Urbana, 2000), 93–129; see also cracies, Kaiser presented himself as little diff erent from a traditional Katherine Archibald, War- shop proprietor. This was the core of his strategy of personalizing his time Shipyard: A Study in Social Disunity (Berkeley, business, which stood in sharp contrast to reality — aft er all, Kaiser 1947). worked within the framework of larger consortia not only when it 37 Penny Colman, Rosie the came to building dams. For example, while the public identifi ed Riveter: Women Working exclusively Kaiser with the revolution in shipbuilding through serial on the Home Front in World War II (New York, 1995), production, the facilities in Richmond remained in the possession of 68.

SCHANETZKY | HENRY J. KAISER 297 the U.S. Maritime Commission, and initially Kaiser only held only a minority share in the operating company. Until the end of 1941, half of that company belonged to the established Todd Paciﬁ c Shipyards, while the other half was in the hands of a consortium, which Kaiser headed, but his partners from the construction industry held more shares than he did. Even aft er the separation from Todd, Kaiser’s ownership share remained at just below 24 per cent. To some extent, then, other companies were able to become “silent partners” in proﬁ ting from Kaiser narrative.38

If one examines the semantics of his success more closely, what stands out is Kaiser’s meticulous dedication to marketing his own capabilities and reliability. In every bidding process, the entrepreneur deployed relevant materials, submitting not only the technical requirements for the bid, but also added photographs and statistics to remind the client of his record for supplying the highest quality at the lowest price. This reputation was his most important resource, and early on, Kaiser employed in Oakland an archivist to oversee the company’s historical records. Her department provided the material for a constant stream of new compilations. They turned the per- sonage of the entrepreneur into the focal point of what were really highly disparate projects; ﬁ nancial aspects were masked in favor of the technological accomplishments. A narrative that focused on a sequence of successful projects was used to make the client feel that he could conﬁ dently rely on Kaiser to execute it successfully. Later, when Kaiser was put on the defensive with respect to his company’s social policies, he enlarged this apparatus: the result was the emergence of a PR department whose members supplied the material for the political apologias that were distributed in print runs numbering into the tens of thousands.39

What was decisive, however, was the systematic cultivation of the semantics of speed. Just how much Kaiser also instrumentalized private matters in the process, and how ﬂ uid the boundaries were between personal temperament, symbolic actions, and systematic 38 Merchant Marine Hearings, 395–401. marketing, is revealed by the story told about the building of his summer home on Lake Tahoe: “Kaiser saw a ten-acre piece of lake 39 HJKP 299, History of Kaiser Organizations, 3 volumes, front that he would buy cheap. A creek fed into the acreage and it was undated; HJKP 127/35, largely swamp. Kaiser bought the land on Saturday, had power shov- O’Conner to Fawcett, July 24, 1947; HJKP 276/36, “Brief els, dump trucks and bulldozers at work on Sunday, was draining the Summary of Experience of the land and dredging a speedboat harbor by Monday, had an architect Kaiser Organization,” March 1945. down from Portland, Oregon, by Tuesday, began building a lodge,

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boathouse and four stone cottages by Wednesday, with a crew of 100 men at work. The equipment made so much noise that neighbors sought an injunction to restrain him at night, but before the sheriff could serve the papers the project was fi nished and the machinery was gone. It had taken Kaiser twenty-eight days to turn the swamp into a landscaped show place.”40 This, or something similar to this, is how newspapers reported the story in the summer of 1941 in their fi rst portraits of Kaiser. The construction of the compound six years earlier had actually taken closer to two months. Still, the rapid construction of the house so close to the offi cial completion of the Hoover Dam was a demonstration. Kaiser’s younger son instrumentalized it for the fi rst time for PR purposes in his May 1935 speech at the victory celebration of the Hoover consortium. Soon aft er it was available in print and distributed to business partners and politicians.41

This is not the only case in which it is hardly possible to separate character and stylization, reality and staging. Kaiser was reportedly a terrifyingly dashing driver, though there is no evidence to that ef- fect. But the fi les do reveal that he engaged in speedboat racing with his neighbors in Tahoe. A constant phone user with supposedly the largest long-distance phone bill in the American West, owner of the largest cement factory in the world, inventor of the longest conveyor belt in the world — where the press was hungry for superlatives, Kaiser obliged. Even that he was an immoderate eater (confi rmed by the cholesterol values in his medical fi le) readily fi t into this picture of a restlessly energetic man of action. Only on one occasion was the reporting about his urge to forge ahead speedily unpleasant: when his wife Bess died in 1951 aft er a long illness and the 68-year-old widower announced two weeks later that he would soon marry 34 40 Taylor, “Builder No. 1.” year-old Alyce Chester — the long-time private nurse of his wife.42 41 HJKP, 255/1, “Testimonial Dinner,” May 9, 1935.

42 HJKP, 260/9, “Medical Planning for Post-war Prosperity records Henry J. Kaiser”; Heiner, Empire Builder, Kaiser had been thinking about America’s post-war economy as 361–74. early as 1942, and he put a team of engineers to work designing new 43 HJKP, 127/16, clipping of products for the civilian market. Even if ideas such as a one-person Congressional Record, July helicopter or a lightweight car did not pan out, Kaiser was persuaded 23, 1942; see for example HJKP 262/19, Henry J. that California off ered dramatic possibilities for development and he Kaiser, “Management drew the picture of a consumer society that would be characterized Looks at the Post-War World, Address before by pent-up demand that government, unions, and businesses would the Annual Meeting of have to cooperate to bring to fruition.43 He invested his proﬁ ts from the National Association of Manufacturers,” Dec. the armaments business accordingly. When the war ended Kaiser 4, 1942.

SCHANETZKY | HENRY J. KAISER 299 made no eff orts to purchase the shipyards from the government which owned the plants. In the same way he exited as the operator of the magnesium facilities and left them to their uncertain fate. However, he kept the steel works in Fontana. In the future, the steel and health care sectors would be joined by two others: aluminum and cars. In the 1950s, Kaiser also created Engineer Consulting, since his organization had gathered important experiences during the war, which it henceforth marketed as engineering services.

The preconditions for the large restructuring of the company were created once again by the state. The military now approached the conversion to a peacetime economy with the same carefree attitude with which it had disregarded the necessary fi nancing for the arms buildup. Within a very short period, so-called surplus property — mostly equipment and plants — valued at 17 billion dollars (190 billion in 2010 dollars) passed into private hands. This promoted the kind of concentration of economic power that had already become apparent in the war economy: two-thirds of this property went to only eighty-seven large companies at rock-bottom prices.44 This is also how Kaiser acquired the new segments of this company. Since 1943 he had been sounding out possibilities for entering automobile manufacturing, and in July 1945 everything moved very quickly. Within a few weeks, a cooperation with Joseph W. Frazer came into being, which eventually led to the founding of the Kaiser-Frazer Corporation. Frazer had decades of experience in Detroit and had helped the Jeep manufacturer Willys-Overland to succeed during the war. The partners each took half a stake in the new joint enterprise and leased from the RFC the shuttered Ford factory at Willow Run, in Michigan, where B-24 bombers had been produced on the assembly line during the war. Initially the partners covered their need for capital with Kaiser’s fi rst public off ering, and the production of the fi rst cars began in 1946.

Kaiser also entered the aluminum industry by following the same pattern. At the beginning of 1946, the RFC solicited bids for operating production sites that Alcoa, as the previous lessee, did not believe had any chance as civilian plants. Although Alcoa was known for the rigid methods with which it defended its de facto monopoly, Kaiser initially received open support from the company because the Justice Ministry pushed Alcoa to do so by pointing to the Sherman Antitrust Act of 1890. Nevertheless, Kaiser’s production of aluminum remained 44 Kennedy, Freedom from Fear, 622. initially dependent on Alcoa. Only the new armaments boom

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connected with the Korean War brought the turnaround: the sector expanded massively and moved closer to its customers through a new plant in Louisiana. Kaiser-Frazer, however, very quickly had to struggle with structural problems. The rapid start of production had created problems with quality, and the company lacked a qualiﬁ ed network of dealers and repair shops. With sales declining, the capacity of Willow Run could not be fully utilized, with the result that a renewed conversion to armament production at least ensured some ﬁ nancial relief there. In 1953, Kaiser took over the Jeep manufacturer Willys-Overland, sold Willow Run to General Motors, and moved its automobile production to a new location in Toledo, Ohio.45

Defensive Measures In one respect, the expansion of this second Kaiser company dif- fered quite profoundly from the expansion phase in 1904–1943: it took place in a changed socio-political climate. To be sure, Henry J. Kaiser and his lobbyists managed to gain the sympathies of the trust- busters for his involvement in aluminum and in Detroit. However, since 1945 his form of entrepreneurial activity that was close to the state had come under increasing criticism. Kaiser and a few of his managers had repeatedly testiﬁ ed before Congressional committees throughout the war years. The investigations of the Truman Com- mittee and hearings on labor shortages or the technical problems of shipbuilding had off ered Kaiser a stage for self-promotion.46 This changed when a committee in the House of Representatives took a close look at war proﬁ ts in shipbuilding: the representatives asked tough questions, expected comprehensively documented answers, and the hearings were pervaded by an aggressive tone. Critical press reports accompanied the time-consuming hearings.

Kaiser’s status created a prominence that eventually made a scandal out of his successes. His opponents argued that his company 45 Heiner, Empire Builder, had received illegitimate proﬁ ts that could only be explained as the 223–49, 266–307; Foster, result of “favoritism.” To be sure, Kaiser had plenty of enemies: his Henry J. Kaiser, 145–64, 200–209. outsider strategy had contributed to this from the very beginning. He likely gained more enemies at the beginning of 1946, when, dur- 46 U.S. Senate, Hearings before a Special Committee ing the serious conﬂ ict over collective wages in the steel industry, Investigating the National he not only joined the side of the government, but in addition also Defense Program, 77th Cong., 1st sess., Jan. 14– undermined the negotiating position of his colleagues in the industry April 3, 1943, 7009–32. through public criticism.47 To the steel barons and their allies, Kaiser 47 HJKP, 263/6, press re- was now seen as a Socialist more so than ever before. Even if Kaiser lease, Jan. 19, 1946.

SCHANETZKY | HENRY J. KAISER 301 merely testifi ed as a witness, as he did during the investigations against Howard Hughes, for example, the charge of favoritism by the government hung stubbornly in the air. To be sure, more than once his enemies operated with unjustifi ed accusations. From Kaiser’s perspective, however, the damage to his image weighed heavily, and thin-skinned as he was, he began a battle for his reputation that he waged with all possible PR means. He long since considered the capital the “center of the ‘Get Kaiser’ snipings.” Kaiser advanced his view of things in an endless stream of press releases, counterstate- ments, and propaganda brochures. In the process, Kaiser bet entirely on persuading the public, even though that is precisely where the sentiments had fundamentally changed — a shift that had already been revealed by the Congressional elections in November of 1946, when the Republicans captured the majority in both houses of Con- gress for the fi rst time in fi ft een years. But Kaiser was convinced: “Our democracy is based on truth. The men who have been attack- ing me with half-truths and misrepresentations have forgotten that. The truth will reveal the reasons for their secret plotting and vicious campaign. I think investigations are wonderful. Democracy lives only through full disclosure.“48

As long as important plants of the company were in fact government property and merely leased, as long as the RFC was fi nancing Kaiser’s enterprises with loans totaling nearly $150 million (or $1.67 billion in 2010 dollars), and as long as Kaiser was thus clinging to a state-centric business model, the accusation that his success was not due to free competition but government assistance could not be dismissed. One example of the repercussions of this defensive position is Kaiser’s activity on behalf of the Fontana steel plant. Its expansion was incomplete, since it had been conceived during the war as a pure supply plant for the shipyards; when it came to further processing in the rolling mill, investment was urgently needed to refi t it for off ering products for the civilian market. Kaiser would have much preferred to build the plant directly on the coast, but the military prevailed in forcing an inland location, which entailed high freight costs. Unlike the shipyards, the smelting complex was owned by Kaiser and had been fi nanced with RFC loans. In 1945, Kaiser be- 48 HJKP, 277/14, “Outrage in Steel, as told by Henry J. gan to lobby the state agencies for a reduction of the remaining debt. Kaiser”; HJKP 263/20, press When it came to Fontana, the same criteria were to apply that were release, Sept. 20, 1946; see also Kaiser Company, “Facts used in the sale of surplus property. The basis for comparison was a in Brief”; quotation: HJKP plant operated by U.S. Steel in Geneva, Utah. It had cost nearly twice 263/15, Kaiser over ABC, Aug. 7, 1946. as much as Fontana, and the steel company was able to acquire it on

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favorable terms aft er the war. Kaiser fought nearly four years in vain: the RFC insisted on repayment of the outstanding loan and declared itself merely willing to support the expansion of the plant.49 The fact that this political failure coincided with fi nancially successful years made it easier for the company to embark on a fundamental change of course: with mediation from his home bank in the West, Bank of America, in 1948 Kaiser for the fi rst time approached East Coast banks with his wishes for fi nancing. First Boston Corp. organized a public off ering. The money it raised, together with retained profi ts, helped Kaiser to acquire complete ownership of the leased aluminum plants for thirty-six million dollars. A year-and-a-half later, Kaiser Steel proceeded the same way and took in $125 million (or $1.1 billion in 2010 dollars). With that, Kaiser completely redeemed the RFC loan on Fontana.

This separation from the state was a symbolic act, since even aft er this fi nancial reorganization his engineers continued to win government contracts, and the military was dependent on Kaiser’s products during the Korean War and later in Vietnam. This move becomes understandable if one considers, in addition to the sociopolitical background, the changing leadership conditions within the company. Together with Edgar Kaiser, a phalanx of younger managers moved into the company’s burgeoning upper management, and Henry J. Kaiser was soon barely present in the day-to-day business activities. Aft er the death of his wife Bess, Kaiser married Alyce Chester on April 10, 1951, and soon resettled with her in Hawaii. The elder Kaiser kept on top of all important questions — at one point provoking a serious leadership crisis in the health company Kaiser Permanente because he constantly interefered in details and personnel questions. But the Kaiser Company’s separation from the state, and thus Henry J. Kaiser’s model of government entrepreneurship, evidently also eased his successor’s path. In any case, Edgar Kaiser made a name for himself as the head of a company that transformed itself rapidly into a multi-divisionally organized managerial enterprise during the 1950s. Its central administration grew robustly and in this respect, 49 HJKP, 289/24, “Fact Sheet Kaiser Steel,” c. as well, moved away from the personal leadership of the owner. 1948; Kaiser to Harold Moreover, the capital requirements of the industrial enterprise soon Ickes, March 22, 1947, box 69, Harold Ickes Pa- exceeded the possibilities of self-fi nancing through retained profi ts, pers, Library of Congress. with the result that by the middle of the 1950s, the Kaiser family was 50 “Kaiser Aluminum — no more than a minority owner of important subsidiaries, for example Henry J.’s Marvelous Mis- in aluminum production, while 62.7 percent of the company’s stock take,” Fortune, July 1956; Heiner, Empire Builder, was already in outside hands.50 276–79.

SCHANETZKY | HENRY J. KAISER 303 Social Status Like many successful entrepreneurs, Henry J. Kaiser was a fairly one- dimensional talent with barely any interests beyond his business. He remained active in business until his death, spending his sunset years developing real estate and tourism projects in Hawaii. Beyond his love for fast boats, which ﬁ t so splendidly into the speed narrative, the sources barely reveal a private hobby of the entrepreneur. He did not hunt and traveled only when business required it. Kaiser did not buy any works of art and was not an active patron of culture. He also did not host any charity events through which he could have made a name for himself in the social circles of the communities where he lived. To be sure, in the course of his life he was a member or func- tionary in nearly ninety organizations, associations, and societies. But most of these posts arose from his business, and his membership in the usual local clubs of prominent individuals barely went beyond what was expected from a man in his position.

The entrepreneur’s family lived a ﬁ nancially carefree life, though measured against the dimensions that the company soon took on, it in no way suggests a special need for status. Well into the 1950s, the seat of the company remained a plain commercial building in Oak- land, and the successors of the founder undertook the construction of a representative headquarters only when the need for space had made it unavoidable. Kaiser sought to ensure the resulting complex demonstrated a variety of uses for aluminum as a construction material.51 Privately, too, the family lived comfortably, but without the desire to show off their success by building architectural landmarks. Only the summer estate in Lake Tahoe, which Francis Ford Coppola used in 1974 in The Godfather: Part II as the residence of the Corleone clan, stood out because of its generous guesthouses. But if Kaiser had the construction of a “family home” in mind, his plan failed. By the early 1950s, the estate was mostly being used as a conference center for the company’s top managers rather than as a private retreat.

Kaiser evidently had little taste for the forms of conspicuous consumption that were typical of patrician families on the East Coast. Although Kaiser owned millions in equity stakes, from his perspec- 51 Lauri Puchall, “Looking Down on Creation,” The Monthly, tive the accumulation of wealth was not the real goal of his work but Nov. 1906, http://www. rather a secondary eff ect. A 1946 insurance inventory, for example, themonthly.com/ architexture11-06.html. listed as the signiﬁ cant valuables in Kaiser’s private homes only some jewelry and furs belonging to his wife Bess, the insurance value of 52 HJKP, 296/16, Personal Furs and Jewelry, Jan.12, 1946. which was put at $125,000 (or $1.39 million in 2010 dollars).52 Kaiser’s

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private income also remained relatively modest. Even in an economically outstanding year like 1943, it was just about $310,000 (or $3.91 million in 2010 dollars). Sixty percent of it came from investments, forty percent from salaries and dividends. This compared to personal expenses and the maintenance of his residences that amounted to $91,000 (or $1.15 million in 2010 dollars). That same year, the shipyards, alone, recorded proﬁ ts in the double-digit millions.53

This modest approach towards wealth also characterized the spirit in which his two sons were raised. Both Edgar and Henry, Jr. went through practical training in the company. Unlike their father, however, they also received a formal education. While Edgar ended his economics studies in Berkeley without a degree, his younger brother graduated with a degree in economics from Stanford. The father made it possible early on especially for his older son to prove himself in business, and on the whole one can say that Henry J. Kaiser’s temperament was no obstacle to the succession arrangements: beyond all the public image that was created, the founder was in fact characterized by a restless drive that was continuously urging him forward. It was accordingly easy for him to cede management of some aspects of the company, creating space for Edgar to establish himself as a leader within the company in his own right. Rather than Kaiser, it was his ﬁ rst wife, Bess, who repeatedly took the initiative to look back at what had been achieved, undertaking genealogical research on her side of the family history. Nobody searched out Henry J. Kaiser’s Ger- man roots, which underscores once again how little his origins contributed to his family’s identity.54

How important the Protestant faith was to Kaiser is diffi cult to assess, since we lack personal documents such as family correspondence or diaries. What is clear is that in Tahoe Henry and Bess Kaiser cultivated a close relationship with Noel Porter, the Episcopal bishop of Sacramento. This relationship had its beginnings at the Outdoor Cathedral in Sacramento, where Porter conﬁ rmed the couple on July 55 30, 1939. Kaiser delivered several sermons there, just as he gener- 53 HJKP, 296/17, Ledger ally contributed during the last two decades of his life to cultivating Book Henry J. Kaiser personal, 1933–1951. his own myth in many varieties of Protestant devotional literature. As a result, his public dictates turned increasingly into a caricature: 54 HJKP, 258/20, Bess Kaiser to Sherwood, Nov. everyone had his life in his own hands and could achieve the greatest 21, 1946. successes if he only believed in himself; problems or setbacks were 55 Heiner, Empire Builder, in the ﬁ nal analysis only opportunities and possibilities that one 2–8.

SCHANETZKY | HENRY J. KAISER 305 had to take advantage of.56 Henry, Jr. demonstrated in his private life just how potent this narrative of paternal success was. In 1944, Henry, Jr., was diagnosed with multiple sclerosis, and described how, following his father’s philosophy, he fought the disease with all his might: “Since I was a small boy, each time I got into diffi culties in my daily life and asked him for advice, he would tell me, ‘Problems are only opportunities in work clothes.’ If you meet your problems with courage . . . you will ﬁ nd that problems will become not something to be avoided as undesirable, but rather opportunities for self advancement.”57 In spite of all his exertions, Henry, Jr., died at the young age of forty-four, and the fact that his father gave most of his wealth to a family foundation promoting medical advancement also had something to do with this experience.

Conclusion Kaiser’s importance in the creation of the modern American West cannot be overstated. This is most evident on the eastern side of San Francisco Bay, where his companies contributed signifi cantly to the growth of cities like Richmond and Oakland. Kaiser engineers planned and built substantial portions of the region’s public infrastructure.58 Bridges and roads, river regulation projects and dams, pipelines and public transportation facilities, the supply of drinking water and cheap energy, the creation of steel production on the West Coast, and, fi nally, the building of houses and apartments — Henry J. Kaiser’s entrepreneurial activities played a crucial part in creating the preconditions for decades of prosperity throughout the region. And yet he has been largely forgotten today. To be sure, the healthcare company Kaiser Permanente with more than 180,000 employees is among the largest of its kind, and the plants of Kaiser Aluminum also still bear their founder’s name. However, Kaiser’s descendants 56 HJKP, 263/17, Henry J. Kaiser, are not involved in either company, and the rest of the conglomer- “If He Walked the Earth Again,” address delivered in ate did not survive the transition to second-generation control and the Outdoor Chapel, Lake the upheavals attendant upon the beginning of globalization as a Tahoe, Aug. 18, 1946; Henry J. Kaiser, “Try,” The Instructor, cohesive family possession. June 1961; “Henry Kaiser’s Seven Keys to Success,” The founding and expansion of this company points to the specifi c Reader’s Digest, Nov. 1961. conditions of a short period of American history, and for a brief mo- 57 HJKP, 258/20, Henry Kaiser ment Kaiser seemed to symbolize all the promises and hopes of the Jr. to Ellinger, Sept. 7, 1948. era’s progressive politicians: the possibilities of the American West, 58 Johnson, The Second Gold the feasibility of grand ideas, the drive and energy of free enterprise, Rush; Rhode, “California in the Second World War.” and, fi nally, a consensus between state, unions, and enlightened

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entrepreneurs that was necessary for the welfare of all. In the process one should not lose sight of the fact that Kaiser was, ﬁ rst and foremost, an entrepreneur and acted as such. He provided services and products guided by social needs, and he did so with the kind of opportunism that typiﬁ es many businessmen. While it is true that he was not in the camp of the Roosevelt enemies, it would be equally naive to suggest that he had a political program of his own. In that sense it is not without irony that to the same extent that progressive ideas were questioned, entrepreneurs like Kaiser were attacked. To his enemies, Kaiser served as a disturbing symbol of those forms of Big Government they believed had to be overcome once and for all.

Tim Schanetzky completed his Ph.D. in history at the University of Frankfurt/ Main in 2006. He is currently a research fellow at the University of Jena. His research project is on “Business in the Age of Big Government and War: Henry J. Kaiser and Friedrich Flick.”

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“MY GOLDEN GUT” AND OTHER STORIES: HOW LILLIAN VERNON BUILT HER BRAND

Ute Mehnert

Lillian Vernon (born March 18, 1927 in Leipzig, Germany; died December 14, 2015 in New York City, USA) was one of the most successful German-American entrepreneurs in American post-war history — and arguably one of the most successful female entrepreneurs overall. Born into a wealthy Jewish family in Germany, Lilli came to the U.S. as a little girl aft er escaping from the Nazi regime in 1935. With an entrepreneurial spirit inherited from a family of businessmen, the “Queen of Catalogs” built her mail-order empire from scratch. Thirty-six years aft er Lillian Vernon started her busi- 1 International Directory of Company Histories, ed. ness as a young, pregnant housewife at her kitchen table in an era Tina Grant (Detroit, 2008), of stay-at-home moms, the company bearing her name became 92:207-12, here 207. the ﬁ rst business founded by a woman to be publicly listed at the 2 To the author’s knowl- New York Stock Exchange.1 Combining a rigorous work ethic and edge, there has been no historical research and the conservative strategies of a family business with an open mind no monograph written on towards technological innovation, Vernon chose the life of a classic Lillian Vernon and/or her company yet. Newspaper hands-on entrepreneur for whom business and private life were oft en and magazine articles inseparably intertwined. But while she eventually reestablished her usually refer to her autobiography An Eye For ties to Germany, she has always maintained that “Lillian Vernon” is Winners. How I Built One a genuinely American success story. of America’s Great Busines- ses — And So Can You (New York, 2007, 1st paperback edition) when describing 2 her family background. Family and Ethnic Background Therefore, this essay also relies heavily on Lillian “I think my father was my mentor. He was a good businessman, he Vernon’s book, as well was a European, and he taught me a lot about business.” (Lillian as on interviews for elec- 3 tronic or print media, and Vernon in a TV interview, April 9, 2009) on the answers to a list of written questions Lillian Lillian Vernon was born as Lilli Menasche on March 18, 1927 in the Vernon sent the author per email via her son, city of Leipzig. She was the second of two children; her brother Fred David Hochberg, on July was three years older than her. Nothing in Lilli’s early childhood 15, 2011 (hereaft er quoted as Vernon/July 2011). She seemed to point toward a life in which she would have to take her did not consent to a per- economic future into her own hands. She was born into an entrepre- sonal interview for this essay. neurial family in Saxony, a German state that had a long tradition of bourgeois family entrepreneurship. Her father, Hermann Menasche 3 Interview with Samatha Ettus on Obsessed TV (1898-1962), was a businessman who had made his fortune in (April 9, 2009) http:// lingerie manufacturing. In her autobiography, Vernon claimed that www.viddler.com/explore/ ObsessedTV/videos/65 he was an elegant but most of all “exceptionally intelligent” man (retrieved May 5, 2011).

MEHNERT | LILLIAN VERNON 309 “with a remarkable natural ability to solve problems.”4 Her mother Erna Menasche, née Feiner (1902-1993), came from a Jewish family of diamond merchants in Antwerp, Belgium, where her great-grandfather had settled after emigrating from the city of Cracow in the nineteenth century.5 Vernon described her as a “renowned beauty” who dressed “with Viennese ﬂ air,” but also as emotionally distant.6 Erna Menasche left the early education of her two children mainly to nannies, as most wealthy European families did at the time. A governess taught Fred and Lilli how to behave appropriately in their family’s social circles.

Leipzig, situated in the eastern part of Ger- many, had rapidly grown into the country’s ﬁ ft h-largest city with more than 700,000 inhabitants around 1930. The city was thriving not only as the location of one of the world’s most important trade fairs (Leipziger Messe), Figure 1: Lillian Vernon as but also as a manufacturing hub where publishing, engineering, fur CEO of a multi-million- and textiles were among the leading industries. dollar company. This picture was featured on the cover of her autobiography Vernon oft en described her early childhood in Leipzig as happy. Her An Eye For Winners, pub- parents liked to entertain, hosting ice-skating parties on the frozen lished in 1996. Used with permission from a private pond of their Leipzig estate, or dinner parties at their spacious brick collection. villa. But the family’s privileged life ended with the rise of National Socialism in Germany. Soon aft er Hitler seized power in 1933, the villa was conﬁ scated, and, as Vernon wrote, “they turned the home 4 Vernon, Winners, 13. we loved and were so proud of . . . into Nazi headquarters.”7

5 Ibid., 52. Like most educated, prosperous Jewish families, the Menasches had 6 Talking about her father’s thought of themselves as well-integrated members of German society. death (1962) in a TV interview, Vernon recalled that “I They hoped that the Nazi terror would be a passing phenomenon and was devastated, in a way one stayed in Leipzig for two more years. But when Lilli’s brother Fred is devastated when the main parent dies, and sometimes, was attacked by an anti-Jewish mob in 1935, Hermann Menasche that’s not the mother, some- prepared his family’s emigration to the Netherlands. Aft er little more times it is the father” (Ettus 8 Interview, 2009). than two years in Amsterdam, they moved to the United States.

7 Vernon, Winners, 14. Lilli and her brother arrived in New York City on October 17, 1937. 8 Ibid., 20-21. They had stayed with their grandmother Fanny Feiner in Antwerp

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until their parents had found a place to live and Hermann Menasche had started a new lingerie business in New York. At the age of ten, Lilli — or Lillian, as she was soon called in America — had to adjust to a new country, a new language, and a new school for the second time: “It was very diffi cult when we came to New York because I spoke no English. We moved to a neighborhood with many other German and Jewish immigrants but I mostly befriended Americans since that was the easiest and quickest way to learn the culture, language, and customs of my new homeland.”9 The family rented an apartment on 97th Street on Manhattan’s Upper West Side. This area of the city attracted thousands of refugees from Germany and Austria in the 1930s and during the Second World War. As Vernon put it, “it was not unusual to get on a bus and hear almost nothing but German.”10

While Vernon recalled that she herself wanted nothing more than to assimilate and become a normal American girl as quickly as possible, her parents had a harder time adjusting. They didn’t speak English well, and especially her mother seems to have suff ered from their loss of social status.11 She rejected American fashion and tastes. Although the Menasches became U.S. citizens in 1943/44, “German discipline reigned in our household,” Vernon wrote. “We were expected to obey rules, no questions asked, no exceptions made.”12

Economically, too, the family never regained the status they had enjoyed in Germany. Hermann Menasche had hardly any knowledge of American business methods. He ﬁ nally was moderately successful 9 Vernon/July 2011. with a company manufacturing small leather goods like wallets, cam- 10 Vernon, Winners, 22. era cases, and handbags. It was obligatory for the Menasche children 11 Gene N. Landrum, Proﬁ les to help out in their father’s business on weekends, and their mother of Female Genius: Thir- teen Creative Women Who worked with her husband, too. With the family’s economic future far Changed the World (New from secure, conversations at the dinner table concentrated on busi- York, 1994), 355. ness. There was “nonstop talk of shipments, orders, invoices,” Vernon 12 Vernon, Winners, 26. recalled. “I sat, listened, and absorbed. Every meal was like a class.”13 13 Ibid.

14 At the age of fourteen, Lillian started earning her own money. One of 14 In a short biography ac- her jobs as an usherette at a movie theatre on Broadway not only earned companying an interview that Vernon gave in 1993, her 25 cents per hour, it also allowed her to watch dozens of movies. This she is quoted as saying, gave her what she later called “a marvelous education in all things Amer- “I worked all through high school.” Julie Cohen 15 ican,” including the English language: “Hollywood was my Berlitz.” But Mason, “On Target: Lillian continued working for her father, too. He used to send her to the Lillian Vernon Focuses on Customers,” Management luxurious shops on Fift h Avenue to select expensive handbags for him to Review, May 1993, 22-24, copy; his company then sold those cheaper copies to department stores. here 23. According to Vernon, this was when she ﬁ rst realized that she had kind 15 Vernon, Winners, 29.

MEHNERT | LILLIAN VERNON 311 of a sixth sense for shoppers’ tastes, a special talent for picking items that people would like to buy — items that Hermann Menasche called “winners.” “Soon, I was my father’s source,” she proudly wrote in her book that, for this very reason, bears the title “An Eye for Winners.”16 She would later refer to this talent as her “Golden Gut.”

Lillian Vernon repeatedly pointed out that while her father respected her and used to treat her like an equal,17 neither of her parents ever 16 Ibid., 30. considered her a potential successor in her father’s business. That 17 In her curriculum vitae at Pre- role was reserved for her brother Fred, while Lillian was supposed mier Speakers Bureau, Lillian Vernon described herself as to become a wife and a mother. Even when Fred was draft ed into “deeply grateful” to her fa- the U.S. Army, sent to Europe, and was killed during the Normandy ther: “He never treated me as anything less than equal, invasion of 1944, Lillian was still expected to fulﬁ ll the roles of wife and from that I learned a lot. His optimism and determina- and mother rather than become her father’s successor. And she went tion are part of his legacy to along with traditional expectations, at least for a while. Aft er gradu- me” http://premierespeakers. com/lillian_vernon/bio (re- ating from high school in 1946, she attended New York University, trieved April 10, 2011). majoring in psychology — but “just in case a husband was waiting 18 18 Vernon, Winners, 35. for me somewhere, I also attended classes in home economics.” She dropped out during her junior year and, in September 1949, mar- 19 Unless otherwise noted, all 2010 USD values ried the merchant Sam Hochberg whom she had met a few months calculated using http://www. before at a dance. Hochberg was the American-born son of Polish measuringworth.com/ uscompare/ (retrieved immigrants who had settled in suburban Mount Vernon, NY, running March 28, 2012). a lingerie store. He was nine years her senior. To contribute to the

20 Vernon, Winners, 38. household income (her husband made $75 at Hochberg’s Dry Goods Store, roughly $700 in 2010 USD),19 Lillian worked part-time as a sales 21 Both Vernon and Hochberg agreed on this matter: “The en- clerk and bookkeeper. She quit aft er only a couple of months — both trepreneurial spirit was not in because she was pregnant and because of “the accepted idea that a Sam. My drive and determination disturbed him,” Vernon working wife was an embarrassing commentary on her husband’s wrote in her autobiography earning power.”20 (Winners, 96). Sam Hochberg himself later told a journalist that “diff erences in work phi- Lillian Hochberg started her mail-order business from her home losophy” had ended both their common business and in 1951, just a few months before giving birth to her fi rst son Fred their marriage: “‘I’m more Philip on February 3, 1952. But while both business and family were the playboy at heart, while she’s the hard worker,’ he growing — the Hochberg’s second son David was born on October [Hochberg] says. ‘I just wanted 22, 1956 — the couple’s marriage suff ered. Sam Hochberg worked to earn enough money to live the good life. I would have re- with his wife, but did not share her increasing entrepreneurial ambi- tired 25 years ago, if I could tion.21 Aft er twenty years of marriage, and fi ft een years of running the have aff orded it.’” Quoted in Martha I. Finney, “The Trea- company together, the couple divorced in 1969. sure Of Her Company — Lillian Katz, Lillian Vernon Lillian Vernon married two more times. Robert Katz, an engineer and Corp,” Nation’s Business, February 1987, http://fi nd- entrepreneur who brought his two children from a former marriage articles.com/p/articles/mi_ into the family, became her second husband in 1970; this marriage m1154/is_v75/ai_4664014/ (retrieved April 14, 2012). also ended in divorce in 1988. Ten years later, she married Paolo

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Martino, the Italian-born owner of a Manhattan beauty salon who was twenty years her junior.22 Neither Katz nor Martino ever had an active role in her company. “I’ve discovered it works better that way,” Vernon says.23 And while Lillian Hochberg became Lillian Katz aft er her second marriage, she decided to change her name only once more aft er her second divorce. From then on, the founder chose to be associated with her business rather than with a husband. In 1990, she offi cially registered her own name as Lillian Vernon — the very name she had chosen for her company in 1965 by combining her ﬁ rst name with the business’s original location.

For many years, the Lillian Vernon Corporation remained a family business, as both Vernon’s sons worked for her. But in the end, neither one took over. Fred Hochberg left the company in January 1993 to found his own business, an investment ﬁ rm, and to pursue a career in politics.24 His brother David never showed any ambition to actually run the Lillian Vernon Corporation.25 As neither of Vernon’s sons married or had children, she abandoned the idea of passing her company on to her descendants, and sold her shares in 2003. Vernon retired and lived in New York City with her third husband until her death in late 2015.

Business Development “It is hard to separate Lillian Vernon the person and Lillian Vernon the company.” (Sherry Chiger, editorial director of the industry publication Catalog Age, 2001)26

In 1951, Lillian Hochberg concluded that founding her own business would be the only way out of an economic dilemma. She was

22 Lynda Richardson, “For acting — administrator of writer Tom Healey. CV 25 As the New York Times Catalog’s Namesake, One the Small Business Ad- of Fred Hochberg, http:// reported in 1997: “David Last Big Sale,” New York ministration during the www.exim.gov/about/ Hochberg, 40, says he has Times, April 30, 2003. presidency of Bill Clinton. leadership/fred_ no interest in running the Aft er working for Barack hochberg_bio.cfm company and is happy to 23 Alex Witchel, “Some- Obama’s presidential (retrieved June 15, 2011); remain its vice president times a Great Notion: At campaign of 2008, “Executive Proﬁ le: Fred P. for public aff airs” (Witchel, Home With Lillian Ver- Hochberg was appointed Hochberg,” http:// “Great Notion”). Aft er leav- non,” New York Times, chairman and president investing.businessweek. ing the Lillian Vernon Cor- January 16, 1997; Ver- of the Export-Import Bank com/businessweek/ poration in 2005, Hochberg non, Winners, 196. of the United States in research/stocks/ founded his own agency for 2009. Openly gay himself, private/person.asp?pers artists in New York. 24 A major fundraiser and Hochberg has been in- onId=4301302&privcap campaign advisor for volved in several gay-rights Id=6369571&previousC 26 Cara Beardi, “Lillian Ver- the Democratic Party, organizations like the apId=91031&previousT non Sets Sights on Second Fred Hochberg served, Human Rights Campaign. itle=NEWS%20CORP- Half-Century,” Adverti- among other things, He lives in Manhattan CLASS%20B (retrieved sing Age 72, March 19, as deputy — and later, with his partner, the June 15, 2011). 2001, 22.

MEHNERT | LILLIAN VERNON 313 twenty-four years old, four months pregnant, and had fi gured out that her husband’s earnings wouldn’t be suffi cient to allow their growing family a comfortable life. “I wanted to make some money, and I was having a baby and I couldn’t get a job in an offi ce,” was her laconic answer when, on “Take Your Child to Work Day” in 2000, an employee’s daughter asked her why she had started her company.27 Although more women began to enter the work force in the 1950s, female entrepreneurs were still an exception.28 In general, as Vernon put it forty years later, “it was very unfashionable for women to work in those days.”29 In her autobiography, she described how she would be sitting at her yellow Formica kitchen table (“everyone had one of them”), fl ipping through the ads in women’s magazines like Seven- teen, Glamour, and Charm, and asking herself which of the advertised items she would buy if she had the money. That habit fi rst gave her the idea to sell such items herself — by mail, from home: “What could be more natural, logical, and profi table? I would be using my experience and the skills I had acquired picking out handbags for my father . . . observing shoppers in many places.”30

Lillian convinced her husband to let her invest their $2,000 wedding gift money into her undertaking ($16,800 in 2010 USD). A handbag for $2.99 and a matching belt in black, tan, or red for $1.99 were the ﬁ rst goods she off ered for sale. Her father would manufacture them, charging her $3 for the pair. What made her off er unique was the fact 27 Kate Stone Lombardi, “When that she herself would emboss her customers’ monograms in gold on a Legend Speaks, These Chil- these items. Neither mail order nor monogrammed items were new, dren Listen,” New York Times, May 7, 2000. but the combination of both was Lillian Hochberg’s innovative idea that made her plan successful.31 “Be FIRST to sport that Personal- 28 Mitra Toossi, “A Century of Change: The U.S. Labor Force, ized Look on your BAG and BELT,” read the ﬁ rst ad she placed in the 1950 to 2050,” Monthly Labor Review (May 2002): 15-28, back-to-school issue of Seventeen, a popular teenagers’ magazine, in here 15. September 1951. The $495 ad resulted in several thousand orders, and $ $ 32 29 Lisa Coleman and Fleming sales of more than 16,000 (about 134,000 in 2010 USD). None of Meeks, “I Just Went Out and the giant catalogers that dominated the mass market with their “Big Did It,” Forbes, August 17, 1992, 102-103. Books” at that time would have taken her seriously as a competitor. By the mid-twentieth century, market leader Sears Roebuck boasted 30 Vernon, Winners, 39. yearly sales of $2 billion, and Montgomery Ward mailed out catalogs 31 Landrum, Female Genius, 350. that were more than a thousand pages long.33 None of them would

32 Vernon, Winners, 49. have bothered to off er the kind of labor-intensive product that Hochberg advertised — she “had discovered niche marketing before 33 Robin Cherry, Catalog: The 34 Illustrated History of Mail- she even heard of the concept.” Order Shopping (New York, 2008), 18. The founding legend of what would later become the Lillian Vernon 34 Landrum, Female Genius, 351. Corporation has been retold many times by the media, and by

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Vernon herself. And not unlike what the — albeit much more famous — garage in Palo Alto was for the IT company Hewlett- Packard, Hochberg’s kitchen table would be for the Lillian Vernon company: the icon of a business legend serving as role model for other start-up entrepreneurs. For many years, it was proudly displayed in the corporation’s lobby.

That kitchen table served as fi rst headquarters of Hochberg’s one- woman business. Here she would sort the orders, type mailing lists, personalize the bags and belts, and put together the packages before mailing them to her customers all over the United States. Borrowing the waspy-sounding name from her town of residence, Mt. Vernon, she called her business Vernon Specialties Co. Aft er Fred’s birth, Hochberg fi gured out how to build upon her fi rst success. As she had neither a business plan nor any formal economic training, she proceeded by means of trial and error. She lost hundreds of dollars by putting advertisements in the wrong magazines — much as teenage girls liked her products, they simply didn’t appeal to the more mature readers of Vogue. One particular skill she claimed she could always count on, though, was a seemingly innate, intuitive knowledge of what products her customers would want to buy. She branded this ability her “Golden Gut,” and described it on numerous occasions: “I like to think I was born with a golden gut when it comes to choosing what I sell. Something happens to me when I spot a hot product. I feel it in the pit of my stomach. I know.”35 Whatever special talent she had, Vernon developed and refi ned it over the years by continuously studying magazines and ads, by habitually observing people’s shopping habits and behavior, and — last, but not least — by always keeping track of her own customers’ ordering histories. One might say that even before she started her business, Vernon had begun to develop her own way of market research. She had strolled along shopping miles like Fift h Avenue, observing which window decorations would make people stop to have a closer look. She had worked at a candy store and at a women’s clothing store. She had sold pots and pans by phone. “Wherever I worked,” Vernon wrote, “I kept my eyes and ears open and tried to learn something about what makes a business work — or fail.”36 35 Vernon, Winners, 77. She began to attend jewelry shows and other trade fairs, looking 36 Ibid., 38. See also Erika for suitable items to add to her monogrammed line. Her father had Rasmusson, “Staying warned her early on not to rely exclusively on him, so she looked for Power,” Sales and Marke- ting Management 150 (Au- additional suppliers of goods that she could emboss, engrave, or gust 1998): 44.

MEHNERT | LILLIAN VERNON 315 embroider. Soon, she advertised personalized rings, pins, and lockets in addition to her bags and belts. When she discovered a company that produced black powder compacts shaped like telephone dials, these were so popular with her teenage customers “that I spent weekend aft er weekend engraving these compacts,” Vernon wrote. “On a good Sunday, I could turn out eight hundred.”37

With the American consumer market booming aft er the years of austerity during the Great Depression and the Second World War, Vernon Specialties quickly grew too large for Lillian’s kitchen. In 1954, when her sales went up to $41,000 ($333,000 in 2010 USD) and surpassed her husband’s earnings at his family’s store, Sam Hochberg began working with his wife full-time.38 They moved into a loft above a bar on one of Mt. Vernon’s main avenues. At that point they also began to include a four-page advertising catalog, illustrated with black-and-white photos showing some of their jewelry on Lil- lian’s hands, with each order. The response was encouraging, so they decided to send a fi rst full-blown catalog to all 125,000 people on Lillian Hochberg’s list of customers in 1956. The catalog was thirty-two pages long and featured 175 items, mainly personalized accessories priced between $1 and $2.98 (between $8 and $24 in 2010 USD). The step from magazine advertisements only to a combination of ads and catalogs made sales go up to $500,000 (almost $3.8 million in 2010 USD) in 1958. Two years later, the Hochbergs rented a 5,000-square-feet warehouse in the nearby town of New Rochelle and had the company incorporated. As another business was already registered in New York State under the name of Vernon Specialties, the Hochbergs changed the name fi rst to Vernon Products, Inc., before they fi nally settled on “Lillian Vernon” in 1965.

From the very beginning, Lillian Hochberg knew that her file of customers was her major asset. When her newly rented warehouse was hit by a cement truck, and much of their merchandise as well as her mailing lists were ruined, she was furious when 37 Vernon, Winners, 73. neither banks nor insurers would accept that fact: “In their eyes,

38 Ibid., 62-65. there was no collateral. My absolutely irreplaceable and invaluable list of customers was considered intangible . . .”39 She oft en 39 Ibid., 95. described how from day one, she used to type each purchaser’s 40 This ﬁ gure was released by name, address, and ordering amount on index cards — building the company and quoted in a New York Times article the foundation for the mailing lists and databases with up to in 2004. Elsa Brenner, “As twenty-seven million names which would later be the backbone of C.E.O.s Go, Hardly Retiring,” New York Times, June 6, 2004. her catalog empire.40

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In the late 1950s and early 1960s, Vernon Products grew into a more complex enterprise. The Hochbergs ventured into some jewelry fabrication of their own in 1957. One of their products, a decorative magnetized bobby-pin cup, earned them a supplier contract with the U.S. cosmetics giant Revlon in 1962. Orders from other leading cosmetics companies like Elizabeth Arden, Helena Rubinstein, Max Factor, and Maybelline followed.41 When the Hochberg’s marriage ended in divorce in 1969, the couple also split their business: Sam kept the manufacturing branch, Lillian kept the catalog — and the precious mailing lists. The catalog business was already doing about $1 million in sales by that time.42 Free monogramming of all products, coupled with a full and limitless refund guarantee, remained a signature asset of her business. Even customers who returned personalized items aft er ten years would still get fully reimbursed. In addition to jewelry, the company began to off er household items like drawer di- viders and corner racks. By 1974, the Vernon Specialties catalog had expanded to ninety-six pages — most of them in color — off ering jewelry, leather goods, cosmetics boxes, and a few household items, but mainly knick-knack like doorknockers and bookmarks. Among their bestsellers were personalized Christmas ornaments that had been introduced in 1968: within a few years, more than seventy-ﬁ ve million of these were sold.43

Aft er parting ways with her husband, Vernon had to focus on ﬁ nding new suppliers. Part of the solution was “to go global,” as “American consumers were developing a taste for exotic products.”44 She began visiting trade fairs in Europe in 1972. In 1980, aft er a scouting trip to the Far East, the Lillian Vernon catalog became one of the ﬁ rst American retailers to off er merchandise “made in China.” Establish- ing and maintaining reliable business connections with suppliers all over the world became one of Vernon’s most important tasks. She spent up to four months per year traveling for business purposes.45

Venturing into new realms back home, too, Lillian Vernon established The New Company, a wholesale manufacturer of brass products, in 41 Vernon, Winners, 89-90. Providence, RI, in 1978. At the same time, Vernon’s son David took responsibility for Provender, the company’s new wholesale division. 42 Coleman and Meeks, “I Just Went Out,” 103. Other retailers had become interested in selling products with the Lillian Vernon brand, and Provender supplied them with Lillian Vernon’s 43 International Directory, 208. 46 own line of toiletry items, specialty foods, and kitchen textiles. 44 Vernon, Winners, 121.

The Lillian Vernon brand had evolved as a strategic reaction to the 45 Ibid., 125. changes in post-war America’s socioeconomic fabric, which were 46 International Directory, 208.

MEHNERT | LILLIAN VERNON 317 gradually transforming the catalog market. Up until World War II, the so-called “Big Books” — the Montgomery Ward catalog and the Sears, Roebuck catalog that off ered everything from appliances to underwear — had dominated the trade. They were aimed at families in the rural United States. Starting in the 1950s, the rural market was progressively replaced by the suburban market — ”and for suburban customers,” Vernon wrote, “I realized you have to specialize.”47 What helped her start-up catalog businesses was the fact that both Sears and Montgomery Ward were concentrating their eff orts on other retail sectors at that time. Even before the war, both companies had begun to open outlet stores in cities all over the U.S. There were more than three hundred Sears stores nationwide by 1930; Sears even operated more than ﬁ ve hundred. And while Montgomery Ward largely failed to address the changes that America’s suburbanization brought for the whole retail industry, Sears tried to meet that challenge by expanding its store system into suburban areas with their sprawling shopping malls, rather than trying to speciﬁ cally address suburbanites in catalogs.48

Lillian Vernon’s specialization mainly consisted in catering to patrons just like herself: women in their thirties or forties, suburban mothers and housewives who, in increasing numbers, had to juggle family duties and a job outside their home. “I’m a woman who shops,” Vernon put it in a magazine interview. “I’m a woman who raised children. I’m a woman who gets in the car and goes to work every day. I’m a woman who knows what women need.”49

Even when the company had long since started market research through focus groups, Vernon still continued to cultivate her image as intuitive entrepreneur who could aff ord to rely exclusively on her “Golden Gut” because she was, essentially, an ordinary woman just 47 Vernon, Winners, 107. like her customers. She claimed that she personally chose every single

48 For a history of Sears item off ered in her catalog, and wouldn’t sell anything she wouldn’t Roebuck, see Donald Katz, use herself.50 Starting in 1976, each catalog issue featured Vernon’s The Big Store: Inside the Crisis and Revolution at Sears picture and a personal letter to her customers. “Add the values by (New York, 1987). which I live and that I have incorporated into my company, and

49 Beardi, “Lillian Vernon,” 22. there’s a transition from personality to complete [brand] identity,” Vernon wrote in an online article for the Kauff man Foundation. “In 50 International Directory, 208. my messages in each of our catalogs, I stress that I am my customer’s 51 “Branding: The Power of personal shopper, even though I have a team of buyers scouring the Personality,” http://www. entrepreneurship.org/en/ globe. I encourage customers to e-mail me, and I see to it that each resource-center/branding- is answered. I want customers to know and relate to me as an individ- the-power-of-personality.aspx (retrieved January 7, 2012). ual, and to understand that my company is a reﬂ ection of myself.”51

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This strategy set Lillian Vernon favorably apart in an era of ever more impersonal shopping malls and gigantic department stores, and the company relied on it for decades. “She looks at every catalog,” Lillian Vernon Corp. President Kevin Green explained to a reporter in 2001. “She loves this business.”52

With the proliferation of credit cards and 1-800-numbers, the catalog market boomed in the 1970s and even more in the 1980s. The number of people ordering by mail or phone increased by 70 percent between 1982 and 1992.53 Lillian Vernon grew with the market. Sales climbed to $6 million in 1976 and $60 million in 1982 ($23 million and $136 million respectively in 2010 USD). By the mid-1980s, Vernon urgently needed money for investments. A new national distribution center was in planning, a $25-million project in Virginia Beach to keep up with customers’ growing demand and with Lillian Vernon’s ever-expanding product line. Meanwhile, the company was mailing out eighty million catalogs per year. In 1987, the investment fi rm Goldman Sachs sold 31 percent of Lillian Vernon to the public, col- lecting $28 million for 1.9 million shares.54 Vernon later described her entrance at the New York Stock Exchange with characteristic self- confi dence: “I was making history by introducing the fi rst woman- founded company onto a major stock exchange.”55 In 1988, Lillian Vernon boasted a $6.9 million net profi t ($12.7 million in 2010 USD) 56 on revenues of $126 million. 52 Beardi, “Lillian Vernon,” 22. While the Lillian Vernon Corporation doubtlessly owes its founder 53 International Directory, 208. a lion’s share especially of its early success, it is also true that the 54 The founder and her sons company experienced its main period of growth and expansion split $12 million among aft er Vernon’s older son Fred Hochberg had joined the company. themselves; the rest went into the distribution cen- He started to work for his mother in 1973, aft er getting his MBA ter. Coleman and Meeks, from Columbia University. Vernon claimed that she fi rst wanted him “I Just Went Out,” 103. to “get his hands real dirty” working in the warehouses before she 55 Vernon, Winners, 182. “started to groom him for leadership of the company” and made 56 International Directory, 208. him head of the newly established marketing department in 1981.57 She also gave him full credit for the planning and construction of 57 Vernon, Winners, 162. the Virginia Beach distribution center, which started operation 58 “No one else could in 1988.58 One year later, Hochberg became Chief Operating Offi cer have done it as well or as eff ectively,” Vernon and President of Lillian Vernon. He was then widely expected to wrote later. “Regretta- succeed his mother as offi cial head of Lillian Vernon in the not- bly, I believe that Fred never heard my gratitude; too-distant future, especially since Hochberg obviously had had a parent’s criticism of- a large part in major strategic decisions like the technological ten sounds louder than praise” (Vernon, Winners, modernization and the stock market launch of Lillian Vernon in 164).

MEHNERT | LILLIAN VERNON 319 the 1980s.59 But while Vernon always maintained that she had hoped “to pass the company on to one or both of my sons,”60 she was not ready to let Hochberg take over at that time. Quite obviously, this was at least one reason for Fred Hochberg’s brusque departure from the family business in 1993, and for his severing all ties with his mother 61 59 Consequently, his offi cial bi- for two years. She later wrote that she had been “unprepared for ography on the website of the the blow, and I was devastated. . . . I must confess that I have never Export-Import Bank of the United States claims that it understood his need for such a radical step.”62 was Hochberg who “led the transformation of a small, family mail order company In the early 1990s, external circumstances also turned less comfort- into an international, publically able for Lillian Vernon. The boom of the catalog business had traded direct marketing corporation” http://www.exim. stimulated competition, and it became increasingly diffi cult to stand gov/about/leadership/fred_ out. When Vernon had started her business, there had only been hochberg_bio.cfm (retrieved November 10, 2011). Vernon about fi ft y catalogs nationwide; four decades later, more than ten herself conceded that both her thousand vied for U.S. consumers’ attention and dollars. Not only sons played a major part in her success: “I may have been the had other entrepreneurs founded mail-order businesses aiming at one to start with a dream and similar niche markets (like, for example, Williams-Sonoma), but a line of handbags, but Fred and David were the ones who Bloomingdale’s and other department stores had also begun to issue brought my dreams into the catalogs off ering housewares and gift s. Even Sears had fi nally ven- modern world. They kept on top of the latest technological tured into specialty catalogs, which were continued aft er the com- developments and brought pany decided to fold its famous “Big Book” in 1993. The rise of them into our company” (Vernon, Winners, 164). In successful discount chains like Kmart and Walmart had brought an interview she gave a few further competition, as had home shopping channels on television. months aft er Hochberg’s departure, she said that “Fred Last but not least, additional shopping malls had been built in the did most of the day-to-day United States between 1980 and 1990.63 And just like other retail operations” while she herself was “still very involved in branches, the catalog business had to deal with cyclic economic merchandising” (Mason, “On Target,” 24). downturns and the resulting drops in demand. The fi nancial newspapers reported an increasing number of bankruptcies, which they 60 Vernon, Winners, 160. attributed not just to the current economic crisis and escalating 61 Without providing sources, a mailing costs, but also to a structural crisis within the trade.64 What New York Times reporter wrote in 1997 that “her son Fred helped Lillian Vernon through many cyclic downturns was the fact quit aft er he and his mother that the company off ered mainly small, budget-priced items that disagreed about the timing of his ascension to chairman” consumers could still aff ord in an economic crisis: in the early 1990s, (Witchel, “Great Notion”). The more than half of Lillian Vernon products sold for less than $15.65 company’s offi cial explanation at the time was that Hochberg was leaving Lillian Vernon to 64 John Hinge, “Cata- delivered nine out of ten 65 Contrary to the industry pursue other interests: “I want log Houses That Once items ordered from cata- trend, Lillian Vernon re- to be more involved politically Boomed Find the Checks logs, had raised its ported a “record Christ- and in my charitable work,” are No Longer in the shipping rates for home mas season” in 1991. Hochberg told the press. Mail,” Wall Street Jour- deliveries by more than One of the top sellers in Quoted in the Wall Street nal, April 4, 1991. In that 16 percent. Robin that year’s catalog was Journal, November 24, 1992. year, the U.S. Postal Ser- Blumenthal, “The Ghost a paw-printed pet towel vice had made it up to 40 of Christmas Presents Is for $12.98, personalized 62 Vernon, Winners, 187. percent more expensive Haunting Troubled Cata- with the dog’s name. to mail catalogs, and the loger,” Wall Street Journal, Blumenthal, “Ghost of 63 Cherry, Catalog, 13. courier UPS, which December 11, 1991. Christmas.”

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The company reacted to the changing market structures by further expanding and diversifying the classic catalog business, and by constantly embracing new technologies and sales channels. In 1990, the company launched the Lilly’s Kids catalog, off ering toys and gift s for children. Other specialized catalogs like Christmas Memories, Lillian’s Kitchen, and a gardening catalog followed. By the mid- 1990s, the company was mailing out 179 million catalogs per year to eighteen million people, and handling nearly fi ve million orders. In 2000, Vernon additionally acquired the Rue de France catalog for French-inspired home accessories like lace curtains.66 As the company was preparing for its fi ft ieth anniversary, it was publishing seven catalog titles and débuting three thousand new products per year. It employed up to 1,300 people all year, and more than four thousand during the holiday shopping season. Meanwhile, the Virginia Beach 66 Mark del Franko, “Adieu distribution center had been extended several times and equipped to Rue de France Catalog,” with a computer center. The company had established two seasonal Multichannel Merchant, August 1, 2004 http:// call centers and opened eighteen outlet stores in several states. In multichannelmerchant. 1994, Lillian Vernon ventured into TV shopping via the QVC Shop- com/crosschannel/ international/marketing_ ping Network, and the main catalog was included in The Merchant, adieu_rue_de (retrieved one of the fi rst CD-ROM shopping disks that circulated in the US.67 December 2, 2011).

The company began to off er its merchandise via an America Online 67 International Directory, store in 1995, when electronic shopping was still in its infancy. One 209-10. year later, the fi rst online catalog was launched on the website www. 68 Lorelle VanFossen, “Visit- lillianvernon.com.68 ing the Web Past: Lillian Vernon, Catalog and Web Pioneer,” TheBlogHe- But although sales were still growing in the second half of the 1990s, rald, November 15, 2007 the company began to struggle. With a new catalog to be printed http://www.blogherald. com/2007/11/15/ and mailed every few weeks, Lillian Vernon had become extremely visiting-the-web-past- lillian-vernon-catalog- vulnerable to rises in postal rates and paper costs. Profi ts were halved and-web-pioneer/ in 1996 aft er paper costs had increased by 50 percent, and dropped (retrieved September 3, further in the following years.69 Ironically, 2001 — the year of Lillian 2011). Vernon’s fi ft ieth anniversary — not only marked an all-time high in 69 While Lillian Vernon had $ reported a $12.8-million sales ( 287 million), but also went down as the year in which the net income on revenues company slid into the red.70 of only $193.6 million in 1993, revenues of $255.5 million resulted in only The recession following the burst of the so-called dot-com bubble in $3 million net income 2000 and the terror attacks of 9/11 undoubtedly accelerated Lillian in 1999. International Directory, 210. Vernon’s decline, but industry observers saw long-term structural changes in the retail business as the ultimate cause.71 Most cloth- 70 Lillian Vernon reported a net loss of $1.3 million ing and home-furnishing retailers had expanded their catalogs to for 2001. include smaller items and gift s like those off ered by Lillian Vernon. 71 Beardi, “Lillian Vernon,” American consumers were beginning to move away from catalogs 22.

MEHNERT | LILLIAN VERNON 321 altogether and browse the Internet instead — shopping on websites like Amazon or Ebay, where not only thousands of smaller individual vendors, but also retail giants like Target began to off er their goods.72 At that point, electronic shopping already contributed a share of 15 percent to Lillian Vernon’s revenues, but distinguishing the brand and its products from those of other retailers became even more dif- ﬁ cult in the Internet age.73 And it was not modern technology alone that was radically reshaping the retail sector. Along with American society as a whole, the consumer market was becoming increasingly diverse around the turn of the century. The ﬁ rst suburban generation of white, middle-class women whose needs Lillian Vernon had understood so well, whose tastes she had catered to, and whose brand loyalty she had been able to count on for more than forty years, had aged with her — and, more importantly, had ceased to dominate the mainstream of American consumers.

Apart from the increasingly diffi cult economic circumstances, one of Vernon’s main entrepreneurial incentives had been lost: to hand her family business over to the next generation. Once before, in 1995, 72 From 2000 to 2002, cata- 74 log use among all consumers she had almost sold her company for that reason; now, at the age declined from 42 to 32 per- of seventy-ﬁ ve, she was ready to let go. In July 2003, Vernon sold cent, while the share of online shoppers more than doubled the company for $60 million in cash to Zelnick Media, a partnership from 10 to 24 percent, a study of media executives backed by the Manhattan private equity group found. International Directory, 210. In the mid-1990s, two- Ripplewood Holdings. The founder kept ﬁ ve percent of the shares, thirds of the adult population, or 132 million Americans, an offi ce at the headquarters, and the largely symbolic title of non- had still ordered from cata- executive chairman75 — clearly indicating, though, that she intended logs. Witchel, “Great Notion.” to stay: “I’ve sold my name, but I am still the face and heart and soul 73 International Directory, 210. of the company.”76 The new owners took the company off the New

74 The investment group Free- York Stock Exchange. For its last year as a public company, Lillian man Spogli & Co. had off ered Vernon reported a net loss of $18.6 million. to buy three-quarters of company for $190 million. The deal was called off when the Zelnick Media did not succeed in turning Lillian Vernon around. Less cataloger’s income decreased, than three years later, in May 2006, the company was sold again — and Vernon and Hochberg 77 would not accept a lower price. this time to the Florida-based investment ﬁ rm Sun Capital Partners. International Directory, 209. Once again, Vernon agreed to stay on as non-executive chairperson, 78 75 Tim Arango and Suzanne and to be more actively involved as advisor in merchandising. But Kapner, “Lillian Is Packaging although the new management took what industry observers judged It In,” New York Post, April 17, 79 2003. See also Paul Miller, to be steps in the right direction — trimming management structures “Zelnick Media Leveraging Lillian Vernon,” Catalog Age 21, February 2004, 8. 77 Carolyn Shapiro, “New 78 Jim Tierney, “Lillian 79 Matt Griffi n, “Lillian Owner To Close Lillian Vernon Sold, Muoio Vernon: Slumping Staple 76 Richardson, “Catalog’s Name- Vernon Operations in Vir- Takes Top Spot,” Multi- Figures Out How to Grow sake;” Brenner, “As C.E.O.s ginia Beach,” The Virginian- channel Merchant, July Again,” Catalog Success, Go.” Pilot, April 24, 2010. 2006, 7. April 2007, 14.

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and inventory, while substantially reducing shipping times — sales did not pick up, and the company stayed in the red. Facing a tightened credit market aft er a particularly bad holiday season, Lillian Vernon fi led for bankruptcy protection in February 2008.80 The company was sold by auction three months later to Current USA, a direct marketer owned by the printing and electronics giant Taylor Corporation. Today, the Lillian Vernon Corporation operates from Current’s main location in Colorado Springs. Apart from its website www.lillianvernon.com, the company published three catalog titles with more than seven hundred products per edition in 2011 and claimed to have mailed eighty million catalogs this year.81 As a privately held company, Current USA was not required to publish fi nancial data for Lillian Vernon, and did not respond to questions as to whether the cataloger has become profi table again. The same is true of the private equity fi rm Regent Equity Partners, which bought Lillian Vernon in 2015 as part of its acquisition of Current-USA Inc. from the Taylor Corp. It had owned Current since 1998.82

During the last years of her life, Vernon herself was no longer involved 80 Michael J. de la Merced, with the business. The transition was diffi cult, as she conceded a few “Bankruptcy Protection for years later: “I guess there’s always regrets.” That said, she brushed Retailer,” New York Times, May 3, 2008. Shapiro, sentimentality aside for a more businesslike summary: “But you do “New Owner.” Two other things that you have to do.”83 well-known retailers that ﬁ led for bankruptcy protection that year were Linens ’n Things and Social Status and Personality Sharper Image.

“Forget her impeccable cashmere ensembles, red lipstick and sprayed 81 About Lillian Vernon, hair. The part you can’t see is steel.” (A New York Times reporter about company proﬁ le http:// www.lillianvernon.com/ Lillian Vernon, 1997)84 CustomerService/Index/ AboutLillianVernon (re- Lillian Vernon was a petite woman, but she would make sure that she trieved January 12, 2012). was not going to be overlooked. She wore high heels to the offi ce even 82 Wanye Heilmann, “Cur- rent Sold to Equity Firm,” when she had broken her ankle a few weeks earlier, and the doctor Colorado Springs Gazette, had only just removed the cast.85 But those heels that brought her December 4, 2015 (retrieved August 1, 2016); up to the 5”3’ she claimed to be were just a minor contribution to Laurence Arnold, “Lillian what many who met her described as her larger-than-life personality. Vernon, Mistress of Mail- Order Catalogs, Dies at “She seems to be able of growing enormous by sheer force of will,” 88,” Bloomberg.com, one interviewer put it aft er describing the following episode: “Recalling December 15, 2015 (retrieved August 1, 2016). an encounter with an employee following the New Year’s holiday, she sits straight up on the couch. ‘I told him, I give my weekend to catch- 83 Ettus Interview, 2009. 86 ing up with your work, and that should be a pleasure, not a chore.’” 84 Witchel, “Great Notion.”

Self-discipline and hard work were core ingredients of Vernon’s 85 Finney, “Treasure.” entire life, and she used to expect no less from her employees, as 86 Witchel, “Great Notion.”

MEHNERT | LILLIAN VERNON 323 from people around her in general. “Intuitive, tough, quick temper, competitive, impatient, confi dent, strong work ethic” were the characteristic traits attributed to her in a profi le for a book about women entrepreneurs.87 According to her fi rst husband Sam Hochberg, however, Vernon had been unaware of her own strong entrepreneurial drive before she actually started her own business. She never had shown much ambition while working for others, he told a reporter many years aft er their divorce.88 Once those entrepreneurial traits were activated, though, there was no turning back, even at the price of her marriage. “I really loved my fi rst husband,” Vernon told USA Weekend in 1986: “If we hadn’t worked together, I think we’d probably still be married.”89 Just as for her husband, it would later be diffi cult for her sons to work with a mother who, by virtue of her success, frequently claimed that she knew better and best, and who obviously enjoyed power games.90 Vernon herself attributed her tough demeanor to the times when, as a young start-up entrepreneur, she had to elbow her way into a male-dominated world.91

Vernon carefully fostered her image as an exemplary entrepreneur ever since becoming head of a multi-million-dollar business, and

87 Landrum, Female Genius, successfully so: she was advertised as a role model by politicians, 358. business organizations, women’s rights activists, and the media.92 88 Finney, “Treasure.” She became a member of infl uential businesswomen’s networks like the Committee of 200, and she served at the National Women’s 89 Landrum, Female Genius, 355. Business Council that was established in 1988 to advise the president and Congress. In 1990, Forbes chose her among “The Year’s 90 This is illustrated by the following episode described in a 25 Most Fascinating Business People.”93 She never regarded herself New York Times report: “David Hochberg is here now, as a feminist in an ideological sense, though. Like many self-made fi les in hand. Cold air rushes entrepreneurs, she offi cially scoff ed at theory, and referred to herself in behind him. ‘No coat, David?’ his mother asks. as a practical-minded person. When once asked whether she con- ‘I don’t wear coats,’ he re- sidered herself feminist, Vernon answered: “You’ve got Gloria plies. ‘Didn’t I buy you a coat, David?’ she persists. Poker- Steinem and whatever her name is . . . Betty Friedan. They just faced, he talks only business” talked about it. But you know what? I went out and did it.”94 The (Witchel, “Great Notion”). exemplary stories she used to tell — or that were told by her PR 91 Quoted in Vernon’s CV department — oft en sought to promote her image as a pioneering http://premierespeakers. com/lillian_vernon/bio (re- woman in many fi elds. This image, of course, would also serve her trieved July 12, 2011). business purposes. There is the story about “Take Your Daughters

92 Landrum, Female Genius, to Work Day” in 1992, for example: when Vernon learned that David 348-49. Hochberg had arranged for her to receive her employees’ daughters 93 Forbes, January 1, 1990, 65. at the company, she refused to play along unless her employees’ sons were invited, too. Needless to say, she got her way, although 94 Coleman and Meeks, “I Just Went Out,” 103. PR director Hochberg later claimed to have kept the attendance of

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the boys quiet because “it was considered so politically incorrect at that time.”95

Having established her own business, Vernon tried to encourage others to do the same. Her autobiography was written mainly for that purpose: as its subtitle (“How I Built One of America’s Great Businesses — And So Can You”) implies, it is rather a how-to book than a classic autobiography — including a checklist titled “The Successful Entrepreneur’s Toolkit.” Her toolkit contains long lists of Do’s and Don’ts (“Don’t spend more money than you have . . . Keep your debts manageable”), rules of thumb (“I have this rule of thumb: every unhappy customer will tell ten others about a bad experience”), aphorisms (“Instinct will get you started, but it won’t sustain you”), and proverbs (“A time-saver is a lifesaver”).96 These rules were constantly reality-tested in her business, used in an operation that Vernon described as applied common sense: “A lot of it is street smarts, common-sense intelligence,” she once put it. “It’s wisdom, not a degree, that gets you ahead in business.”97 Her biggest setbacks happened, Vernon wrote, when “I had failed to follow my own rules.”98

Vernon had a reputation as a “charismatic speaker” at business schools, and held at least half a dozen honorary doctorates.99 But her conviction that a conventional MBA education wouldn’t bring out good entrepreneurs made her endow a chair for entrepreneurship at New York University through the Lillian Vernon Foundation.100 Like many prosperous entrepreneurs, she felt she owed part of » authors on the subject her success to American society, and was committed to “giving back of management theory, wrote in 1985: “By and 95 Lombardi, “Legend.” trained at professional way we operate” (Win- large, big companies have management schools to ners, 167-73). More been successful as entre- 96 Respectively: Landrum, run her growing busi- than ten years later, she preneurs only if they use Female Genius, 356; ness on a day-to-day claimed that she had their own people to build Vernon, Winners, 113, basis, only to discover learned to trust the in- the venture. They have 110, 78. that “most people with stincts of her senior been successful only when MBAs are not at the managers “as well as they use people whom 97 Quoted in Elsa Brenner, same wave length as en- my own,” and ascribed they understand and who “Women at Helm Set trepreneurs.” Instead of her company’s success understand them, people a Course to the Top,” making their own deci- to “team eff ort” (Lillian whom they trust and who New York Times, May 10, sions, Vernon scoff ed, Vernon, “Entrepreneurs in turn know how to get 1998. “those MBAs carried and Professional Man- things done in the exist- analysis to the point of agers,” Management ing business; people, in 98 Vernon, Winners, 172. paralysis.” She found Review 88, February other words, with whom out that she could work 13, 1999). This was, of one can work as partners” 99 Landrum, Female Genius, better with outside con- course, hardly a unique (Peter Drucker, “The 348. sultants and with man- observation by a single Entrepreneurial Busi- agers who had been entrepreneur. As Peter ness,” in Innovation and 100 A story Vernon loved to promoted from within, Drucker, one of the most Entrepreneurship: Practice tell in that context was “who know the company inﬂ uential thinkers and and Principle [New York, how she hired people and have a feel for the most widely read » 1985], 147-76, here 175).

MEHNERT | LILLIAN VERNON 325 to her community.”101 Her foundation not only supports business- related causes, but also art programs, medical research, and charities like Meals on Wheels. Vernon herself became a board member of the Lincoln Center for the Performing Arts, Bryant College, the Children’s Museum of Art, and many other institutions. Politically, Vernon and her family have long been affi liated with the Democratic Party. Her ﬁ nancial contributions to the party and its presidential campaigns earned her an overnight stay at the White House;102 her son Fred served as a major fundraiser for the Democrats before being appointed chairman and president of the Export-Import Bank of the United States by President Obama in 2009.

In her busy social life, too, business and private life were always closely connected. Especially aft er she had married Paolo Martino (who was reported to be a dedicated chef), she oft en entertained at her home even while she was still CEO. Apart from their apartment in New York City, the couple owned a spacious house in Greenwich,

101 CV of Lillian Vernon http:// Connecticut, where they hosted dinners or theme parties. According premierespeakers.com/ to a social reporter who visited in 2004, Vernon’s guest book “reads lillian_vernon/bio (retrieved July 12, 2011). According like a who’s who of politics, ﬁ nance, publishing and the arts,” and to a corporate report from year aft er year, the hostess “loves to pull off the perfect party,” be it 1998, Vernon’s company 103 donated funds and merchan- for Halloween or the holidays. Business magnates, artists, and ce- dise to more than ﬁ ve hun- lebrities would bring some of the glamour that Vernon had admired dred charities, religious, and civic organizations. Valerie as a teenager to her home — a home that, at the same time, served Cruice, “Starting Simply: The as showroom for her products. No guest would ever leave without Story of a Business,” New York Times, May 24, 1998. a monogrammed napkin ring or another personalized gift from the Lillian Vernon catalog. 102 Brenner, “As C.E.O.s Go.”

103 Meredith Gray, “Home Aft er retiring from the top executive position, Vernon kept up her self- for The Holidays,” http:// www.panachemag.com/ discipline and, to a certain degree, her competitiveness. She would Food&Wine/Lillian_Vernon_ never appear anywhere but impeccably coiff ed and dressed. When she Holiday_Entertaining.asp (published in 2004; retrieved was interviewed, she never forgot to mention that she worked out daily on March 28, 2012). to stay in shape. ‘‘Now look at those muscles,” she told a journalist

104 Brenner, “As C.E.O.s Go.” when she 76. “They’re not something you’d expect to see on a woman In 2009, when Vernon was my age.’’ The reporter conﬁ rmed: “Indeed they were not.”104 Always 82, she claimed that she was still working out — and blunt, Vernon openly admitted to having had plastic surgery and to working — “every single seeking professional help from a therapist in times of personal crisis.105 day” (Ettus Interview, 2009). But even those experiences, private aff airs for most people, were inte- 105 Richardson, “Catalog’s grated into her public personality to serve an exemplary purpose — in Namesake:” “She is all can- dor. ‘I’m wrinkleless; surely this case, that you may fall, but you can always pick yourself up again. it’s not me,’ she says, un- blinking, joking that even Vernon described the obligation to run one’s business ethically 12-year-olds have plastic surgery these days.” as an important part of a true entrepreneur’s work ethic, because

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in the end it’s the long-term impact that matters, not short-term proﬁ t. She insisted that money is important, but it is not everything.106 And she contended that passion, not greed, should be an entrepreneur’s motivating force.107 She once pointed out that she wanted to be remembered as “someone who wanted to make a diff erence” and added, aft er a short reﬂ ective pause: “And I do believe I did. I won’t be one of the Obamas of the world, or the Clintons of the world. But I think lots of people know who I am, which is very gratifying.”108

On another occasion, Vernon described life as a puzzle: “At the end of the day all the pieces have to ﬁ t.” And if it turns out they don’t? Her answer comes as no surprise: “Go back and work hard ﬁ tting them again!”109

Immigrant Entrepreneurship “I consider myself American, not German-American.” (Lillian Vernon, June 2011) 106 “Look at it this way: If your business stops Lillian Vernon occasionally referred to her German background, men- making money, it stops tioning half-jokingly, for example, that “my Germanic upbringing may breathing,” Vernon explained in her autobi- have made me hardworking, but it did not turn me into the classic ography. “But you don’t German do-it-all hausfrau.”110 Given the circumstances of her fam- live your life just to keep breathing. You live it for ily’s forced emigration, though, it is no wonder that she didn’t give a sense of accomplish- her German heritage much credit for her career. For more than three ment, of satisfaction” (Winners, 53). decades, she refused to even set foot in her country of birth, which she 107 “New York is ﬁ lled with also blamed for her brother Fred’s death in the Second World War. these lunatics these “Then I realized,” Vernon said, “that while it is important never to days,” she said in an in- 111 terview in 2009. “They forget, one must forgive.” In 1972, she returned to Germany for the say, ‘Okay, I took 50 bil- ﬁ rst time. She attended the Hanover trade fair, established business lions today, that wasn’t too bad, was it? Oh well, relations with German suppliers and, from then on, regularly went to I might spend the rest of German trade fairs. But as late as 1987, she claimed that “I won’t go my days in jail, but does it matter?’ But it does” 112 back to Leipzig out of respect for my father.” Finally, she did take (Ettus-Interview, 2009). her sons on a tour of Germany “to rediscover my roots” in 2003. The 108 Ettus Interview, 2009. family went to Leipzig and even visited the apartment Vernon had lived in as a child.113 But even if she claimed to have “made peace” with 109 Witchel, “Great Notion.” her feelings about Germany, Vernon always insisted that the fact of 110 Vernon, Winners, 60. being an immigrant, most notably the process of adjusting to and 111 Vernon/July 2011. integrating into her new country, was much more important than the place and culture she had come from. This would also include 112 Finney, “Treasure.” her Jewish background: “I think being an immigrant is what shaped 113 Vernon/July 2011.

MEHNERT | LILLIAN VERNON 327 me — striving to succeed and get ahead” was how she summarized her point of view. “My religion and [ethnic] roots were not the factor.”114

Aft er they had arrived in New York, the Menasche family concentrated on how to make a living — which was anything but easy at that time. The U.S. economy had slipped back into recession in 1937, and work was scarce especially in the big cities that attracted most immigrants.115 According to Vernon, there was a kind of extended family network they were able to fall back on, but her father would make use of it as little as possible. They lived with a relative on the 114 Vernon/July 2011. Upper West Side for a short time, and then moved into a hotel until 115 In November 1937, a Jewish 116 magazine in Berlin noted: they found their own apartment. She also wrote that her father had “People in Germany are un- two uncles in the city who were successful businessmen, “but he fortunately unaware of the considerable importance of never asked them for help. He was too proud and independent, and the connection between job he was determined to make it on his own.”117 Hermann Menasche opportunities and the place in which one settles. In New worked for one of his uncles as a salesman aft er his fi rst lingerie York there are possibilities fi rm in the U.S. went bankrupt, but only for a few months until he of fi nding a very good job; 118 but these chances are small. could start another business of his own. At the same time, the Much greater is the chance Menasches obviously did their best to sustain their children’s inte- of not fi nding any job in New York at all. The same applies gration into American society: “Our parents spoke German to each to Chicago and to all the big other, but English with us.”119 Lilli and her brother Fred also “worked cities, to the same extent more or less. Unemployment hard” to become Americanized, not only practicing their English, but among the Jewish immi- also taking and comparing “notes on American customs.”120 There grants from Germany is the greatest by far in New are no clues as to whether they befriended any other German im- York. . . . In the big city, the migrant families in their neighborhood where, as mentioned before, immigrant is almost always a social nothing, who is de- their native language was ubiquitous at that time. Clearly, Vernon pendent for an extended pe- saw her immediate family, and not an ethnic network, as the most riod of time on relatives or friends from Germany who important source from which she drew to build her new life, and later are in the same position.” Quoted in Jewish Virtual Li- her entrepreneurial career. brary, “Guenther Plaut on Jewish Immigration to the No historian can measure the impact of extreme occurrences like United States,” Jüdisches Ge- meindeblatt, Berlin, Novem- dispossession and fl ight on any person’s individual life and psyche, ber 21, 1937 http://www. especially when it comes to long-term consequences. Even less jewishvirtuallibrary.org/ jsource/Holocaust/ convincing would be any attempts to generalize causes and eff ects USImmigration.html from such an individual case. It is obvious that being an immigrant (retrieved July 7, 2011). in diffi cult times infl uenced Lillian Vernon’s life and character, but 116 Vernon, Winners, 22. what exactly these circumstances eff ected (or obstructed), we will

117 Ibid., 24. never know. What a historian can try to do, however, is to reconstruct what typical formats individual persons use to make sense of their 118 Ibid., 28. new environment and give direction to their own lives. More than ﬁ ft y 119 Ibid., 24. years aft er her arrival in New York, Vernon wrote that even though 120 Ibid., 23. she felt lonely during the ﬁ rst months, “now, as a businesswoman,

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I understand that there are advantages to being an outsider peering in. Outsiders see with a special clarity.”121 Immigrant outsiders don’t arrive as blank slates, though. They arrive “pre-formatted,” so-to- speak, by a world in which they had been insiders.

Lillian Vernon’s entrepreneurial tool kit — the set of rules, customs, and practices that shaped and explained her business decisions — has already been discussed. At least part of this set was doubtlessly derived from the mentality of a German bourgeois family business. For example, it has oft en been said that Vernon “inherited her father’s European work ethic.” 122 However, in addition to an ethic that values hard work per se there was also a culture of learning and achievement, of mastering skills not only as means to another end (like making money), but as a valuable end in itself: “In my family, nothing was more valued than achievement, learning how to do something well,” Vernon said. “None of us stopped until we had done our best.”123

Vernon relied heavily on the founding legend, complemented and broadened by other stories related to her business. Many observers noted that admiration for her father’s persistence made her choose him as a role model, but what became “indelibly imprinted on Lillian’s young mind” was not an abstract concept of tenacity and adaptability.124 It was the tangible story of her father losing his business several times through circumstances that were not of his own making, and never letting himself be defeated; the story of her father founding no less than three businesses in the U.S. under the company name of “Mercury Products” until he fi nally managed to keep his family economically afl oat. “Just when we seemed fi nally settled,” Vernon wrote, “my father’s business failed again. He was a stranger to American business methods and did not realize that he needed to hire a receptionist, a model, a secretary, a pattern maker, and a cutter. Those were costs his start-up company could not support. Once again, I saw him pick himself up. . . . In a year, he had set up yet another company of his own, which once again he named Mercury Products Inc.”125

121 Ibid., 16. The key lessons from her father’s story would later resurface in Lillian Vernon’s own founding legend, the one set at Lillian Hochberg’s 122 Landrum, Female Genius, 349. yellow Formica kitchen table: “Here I was with diapers in the tub, dishes in the sink, and order forms — everywhere! . . . There were 123 Vernon, Winners, 17. times when I was exhausted. Whenever that happened, one of my 124 Landrum, Female Genius, father’s favorite sayings came to mind: ‘If it was easy, anyone could do 349. your job.’ The memory of those words always revived my enthusiasm 125 Vernon, Winners, 28.

MEHNERT | LILLIAN VERNON 329 back into my work. . . . When I felt my head nodding I would sit up and say, ‘This must get done.’”126

It has long been established that family businesses with their specifi c sets of values, traditions, idiosyncrasies, and rather long-term orientation usually lean towards a high degree of autonomy and fl exibility. Throughout history, entrepreneurs who run family businesses have tended to maintain a sustainable, organic type of growth; they are oft en wary of burdening their companies with too much debt and put a high priority on their independence. These values are a core element of the heritage that the founder of a family business will strive to retain and hand down to the next generation. In this value transmission process, as a German study has recently shown, stories serve as a major vehicle.127 As the author Mirko Zwack explains, stories never tell everything — we leave some things out, enhance other aspects, or even make parts of it up. That way, we confi ne our stories to carry a certain message, or to transport a certain value, without explicitly saying so. What is only implicitly told, however, cannot be confounded: “That’s how a story protects its values from dissent.”128

What medium could be more suitable for a self-made entrepreneur who, apart from founding and shaping a company, would also strive to shape and control the narration of her own life, so that, at the end of the day, all the puzzle pieces should ﬁ t?

Conclusion Lillian Vernon became an entrepreneur almost by chance. Intending to just make some extra money for her growing family at ﬁ rst, her start-up business soon developed into something bigger: a mail-order empire that was as closely connected to her own person as the shared 126 Ibid., 59. name “Lillian Vernon” suggested — a name that she ﬁ rst gave her 127 Mirko Zwack, Die Macht der company, then herself. Geschichten: Erzählungen als Form der Wertevermittlung in Familienunternehmen To perpetuate her life’s work, the family business that she intended (Heidelberg, 2011). to hand down to one or both of her sons, Vernon relied heavily on the

128 Author’s own translation from medium of stories: be it the story of her father’s diffi cult start in the U.S. German original. Quoted in or the story of her own ﬁ rst ad, the story about her still personally tak- a press release of the Uni- versität Witten-Herdecke ing orders from customers on the phone even when the Lillian Vernon of October 24, 2011, on the Corporation was a multi-million-dollar company, or the story about website of the Informations- dienst Wissenschaft http:// how she brought boys to “Bring Your Daughters To Work Day.” They expertenlisten.com/en/ all served as important vehicles to communicate a set of values and news437602 (retrieved De- cember 30, 2011). convictions that were, to a large extent, already part of Vernon’s own

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heritage shaped by several generations of European entrepreneurs. To describe these stories as PR tools to promote her “identity brand” and her sales would simply fall short — even if this purpose was certainly involved. Together with Vernon’s entrepreneurial tool kit (which, to a great part, was also part of her family heritage), all these stories added up to a case history, an exemplary narrative that she ﬁ nally put down in writing in her autobiographic book: to provide a more general role model for other entrepreneurs to strive for, but also to inscribe her own life in a meaningful sense into the larger context of her family’s history.

Not surprisingly, the last chapter of her book is titled “The Test of Time.” It starts with the sentence: “The Lillian Vernon Corporation will endure forever, whether I am here or not” — a rather question- able claim by now, given the rise and fall of the “Queen of Catalogs’” empire along with the catalog industry as a whole.129 And it ends with, again, a story: the description of Vernon’s overnight stay at the White House’s Lincoln bedroom as a moment of epiphany. “I saw then that the success of the Lillian Vernon Corporation had been the realization of my father’s dreams and the validation of my own self-worth that I’d longed for.”130

Vernon left no doubt whatsoever, though, that the country she owed her success to was not her country of birth. The exemplary story that she told follows the classic outline of the Horatio-Alger-type narrative about hardworking, persistent immigrants succeeding in the land of limitless opportunities, regardless of class and origin. “Perhaps it wasn’t the least bit ironic that I found myself in the Lincoln bedroom,” she wrote. “Isn’t opportunity what America is all about? Mine is truly an American story. . . . imagine — from immigrant girl to the White House — only in America.”131

In the end, the story was all about her — and when her son was ready to transfer her life’s work into the next generation, she couldn’t let go.

Ute Mehnert is a German historian and journalist who emigrated to the U.S. with her family in 2006. Aft er studying American History and, speciﬁ cally, Ger- man-American relations in the Age of Imperialism, she worked as correspondent for the international news agency Agence France-Presse (AFP) in Berlin. Today, she is a freelance journalist in Princeton, New Jersey, and teaches European history at Princeton University. Her latest publication is Ute Mehnert, USA: Ein Länderpor- trät (Berlin, Christoph Links Verlag, 2nd edition 2016) — a portrait of the United 129 Vernon, Winners, 199. States for German-speaking immigrants and expatriates, which has also been 130 Ibid. adopted in the book program of the Bundeszentrale für Politische Bildung, Ger- many’s Federal Agency for Civic Education. 131 Ibid., 200.

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POLITICAL IDEOLOGY AND ECONOMIC ACTIVITY: PETER 1 Chris Turner, “The Other THIEL’S LIBERTARIAN ENTREPRENEURSHIP Side of Peter Thiel: Clar- ium Capital, Hedgethink, January 13, 2015, http:// Meghan O’Dea www.hedgethink.com/ resources/side-peter-thiel- clarium-capital (accessed Peter Thiel (born October 11, 1967, in Frankfurt am Main, Federal June 1, 2015). Republic of Germany) is a technology entrepreneur, hedge fund man- 2 Julianne Pepitone and Stacy Cowley, “Facebook’s ager, venture capitalist, libertarian, and philanthropist. He began his First Big Investor, career by co-founding the online payment system PayPal together Peter Thiel, Cashes Out,” CNN Money, August 20, with Elon Musk and Max Levchin in 1998 and served as the com- 2012, http://money.cnn. pany’s chairman and CEO until the company was sold to eBay in com/2012/08/20/technology/facebook-peter- 2002. Since then, he has remained an active public fi gure and inves- thiel (accessed July 14, tor in Silicon Valley by supporting and launching a number of proj- 2015). ects and investment fi rms including: the establishment of Clarium 3 Mohammad Bahareth, Capital Management, a global macroeconomic hedge fund, in 2002;1 Kings of the Internet: What You Don’t Know About 2 investment in Facebook in 2004; the launch of the Founders Fund, Them? (Bloomington, a Silicon Valley venture capital fund, with Ken Howery and Luke 2012), 71. 3 Nosek in 2005; the co-formation of Mithril Capital Management, a 4 Evelyn M. Rusli, “Peter global venture capital fi rm, together with Ajay Royan in 2012;4 and Thiel Opens a New Ven- ture Capital Firm,” New the launching of the Thiel Foundation, a nonprofi t organization that York Times, June 20, 2012. 5 carries out philanthropic activities. Currently, in 2016, he resides 5 Naren Karunakaran, as president of Clarium Capital, acts as a managing partner in the “Charity Reinvented: Disruptive Approach to Founders Fund, serves as a member on the Facebook board of direc- Philanthropy,” The Eco- tors,6 chairs the Mithril committee,7 leads the Thiel Foundation,8 and nomic Times, January 7, 2011, http://articles. regularly appears in the public spotlight through his publications economictimes.india- and talks on entrepreneurship, venture capitalism, and his so-called times.com/2011-01-07/ news/28424069_1_ “contrarian thinking,” which promotes “the business of doing new innovations-philanthropy- things” and the establishment of valuable companies that no one is new-markets (accessed June 5, 2015). building.9 6 Bahareth, Kings, 71. Over the course of his career, Peter Thiel has amassed a vast enter- 7 “Firm Leadership,” Mithril, prise that supports and promotes a number of future-oriented ini- http://www.mithril.com/ tiatives to enhance technological progress, individual freedom, and leadership (accessed June 2, 2015). the future of young leaders in the fi eld of technology. His particular 8 “The Foundation,” Thiel mixing of libertarian ideology and business generates controversy Foundation, 2015, http:// as he tends to support projects and initiatives promoting libertarian thielfoundation.org (accessed June 5, 2015). values within a tight network of Silicon Valley acquaintances and former Stanford classmates and friends. This type of Silicon Valley 9 Peter Thiel with Blake Masters, Zero to One: subculture shaped by ideology and supported through friendship Notes on Startups, or How networks has given Thiel and his former PayPal colleagues (dubbed to Build the Future (New York, 2014), 10-11, the “PayPal Mafi a”)10 the opportunity to support many of each other’s 93-94.

O’DEA | PETER THIEL 333 ventures, including SpaceX, Spotify, and Yelp among others.11 Along with Thiel, this exclusive group of Silicon Valley entrepreneurs is reshaping the ways in which users interact with technology and the web as well as the vast amount of money their private companies can generate within their close network.12

Alongside his work in Silicon Valley and the tech industry, Thiel appears in the public sphere in interviews, articles, and his own writing, within which he strives to advance his ideas on technological development, entrepreneurship, and individual freedom. His ideas are particularly reﬂ ected in his book, Zero to One: Notes on Startups, or How to Build the Future (2014);13 through the Thiel Foundation’s Imitatio Project that supports the philosopher René Girard and his philosophical mimetic theory, which has had the greatest impact on Thiel’s perspective;14 and the most recent and highly controversial Figure 1: German- Thiel Fellowship, which encourages students to put off their uni- American entrepreneur versity education in the interest of developing their own startups.15 Peter Thiel at the 2008 TechCrunch50 Confer- ence in San Francisco. Wikimedia Commons, Family Background, Education and World View Licensed under CC BY 2.0 via Wikimedia Commons. Peter Andreas Thiel was born on October 11, 1967, in Frankfurt am Main, Federal Republic of Germany, to Klaus and Susanne Thiel. The family migrated to the United States when Peter was one year

10 Jeff rey O’Brien, “The old and settled in Cleveland, Ohio, where Klaus Thiel worked as a PayPal Mafi a,” For- chemical engineer. Klaus worked in management for various min- tune, November 13, 2007, http://fortune. ing companies, which caused the family to routinely move. Before com/2007/11/13/ fi nally settling in Foster City, California in 1977, the Thiels lived in paypal-mafi a/ (accessed June 1, 2015). 12 Ibid. ber 10, 2014, http:// 2015). See also 11 David Gelles, “the PayPal www.businessinsider. https://www.youtube. Mafi a’s Golden Touch,” 13 Thiel with Masters, Zero com/peter-thiel-on-rene- com/watch?v= The New York Times, April to One. girards-infl uence- esk7W9Jowtc. 1, 2015, http://www. 2014-11 (accessed June nytimes.com/2015/04/02/ 14 Richard Feloni, “Peter 1, 2015); “Imitatio,” The 15 “Thiel Fellowship,” business/dealbook/the- Thiel Explains How an Thiel Foundation, 2012, Thiel Fellowship, http:// paypal-mafi as-golden- Esoteric Philosophy Book http://thielfoundation. www.thielfellowship. touch.html (accessed June Shaped his Worldview,” org/project/#imitatio org/ (accessed July 2, 15, 2015). Business Insider, Novem- (accessed June 1, 2015).

334 GHI BULLETIN SUPPLEMENT 12 (2016) The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

South Africa and Swakopmund, a small harbor town on the coast of then South-West Africa (today’s Namibia), founded by the Ger- man colonial government in 1892. Peter and his younger brother, Patrick, attended a strict elementary school in South-West Africa that required uniforms and implemented the disciplinary practice of rapping students’ hands with a ruler for mistakes. This experience instilled a dislike of uniformity and regimentation later reﬂ ected in his strong support of individualism and libertarianism as an adult.16

When Peter was nine years old, the family moved back to Cleveland for his father’s work and a year later to Foster City, a planned town north of Stanford on the San Francisco Bay. Although at that time the term “Silicon Valley” was not yet widely used to describe the geographical area from San Francisco to San Jose, it still housed major technology fi rms, such as Hewlett-Packard, Varian, Fairchild Semiconductor, and Intel — companies that were built from money in military research and federal grants in the postwar period. During 16 George Packer, The Un- this time, Stanford also became one of the leading universities in winding: An Inner History the United States, particularly known for its science and technology of the New America (New York, 2013), 120-21. programs.17 In the same year that the Thiels moved to Foster City, Apple began expanding its operations to Cupertino aft er its success- 17 Ibid. 18 ful introduction of the Apple II. As a child and young adult, Peter 18 The Apple II was one of the grew up in close vicinity to major sites of technological developments fi rst computers designed to be a user-friendly, and experienced the rise of personal computing and technological consumer product and innovation fi rsthand. situated Apple as a leader during the earliest decade of personal computing; In school, Peter was particularly gift ed in mathematics and chess. He “The Apple II,” Computer History Museum, ranked seventh nationally in the under-thirteen bracket in chess, and 2015, http://www. later in high school he led the math team, which competed for district computerhistory.org/ 19 revolution/personal- championships. As a youth, he also became an enthusiastic science computers/17/300 fi ction reader, especially enjoying works by Isaac Asimov, Robert (accessed June 2, 2015). 20 Heinlein, and fantasy by J.R.R. Tolkien. These literary, fantastic 19 Packer, The Unwinding, “mental worlds” led him to believe in the powers of technology, and 122. he began thinking about possible ways in which technology could 20 Mick Brown, “Peter Thiel: improve (also potentially harm) the future. J.R.R. Tolkien’s Lord of The Billionaire Tech En- trepreneur on a Mis- the Rings (1954-1955) trilogy, which he claims to have read over ten sion to Cheat Death,” times, served as especially infl uential, encouraging him to consider The Telegraph, Septem- ber 19, 2014, http:// the value of the individual against mechanistic, collective forces as www.telegraph.co.uk/ well as the theme of corruption through power. Herein lie the begin- technology/11098971/ Peter-Thiel-the-billion- nings of Thiel’s philosophical considerations of the individual, which aire-tech-entrepreneur- were later expanded by the works of Ayn Rand, especially through on-a-mission-to-cheat- death.html (accessed June her novels The Fountainhead (1943) and Atlas Shrugged (1957). In his 2, 2015).

O’DEA | PETER THIEL 335 teens, Peter became a libertarian and outspokenly supported these views in the ideological, cultural debates at Stanford during the 1980s.21

Aft er receiving straight A’s in high school and the distinction of valedictorian of his class in 1985, Peter went on to study at Stanford. Perhaps due to his experiences of constantly moving as a child, he chose to stay close to home. Stanford was becoming the epicenter of “Silicon Valley,” and Peter made many connections and developed important friendships that would be instrumental in his later business ventures in the fi elds of computing and technology. However, his time at Stanford was also infl uential for ideological reasons that led to the solidifi cation of his worldviews and support of libertarianism.

Despite the fact that Peter did not have a defi nite plan for his future, he knew that he wanted to impact the world.22 At Stanford, he studied philosophy and engaged in numerous political debates and discussions with acquaintances and fellow classmates. Especially of 21 Packer, The Unwinding, 122-23. interest were the identity politics and political correctness debates at Stanford in the 1980s. The debate arose out of criticisms from a group 22 Ibid., 124. of students who called for the elimination of the required Western 23 James Davison Hunter, Cul- Culture program. Opponents of the Western Culture program claimed ture Wars: The Struggle to Defi ne America. Making Sense it lacked diversity and multiculturalism by only showcasing the work of the Battles over the Family, of white men. Aft er an appointed task forced evaluated the program, Art, Education, Law, and Poli- tics (New York, 1991), 218. a new “Culture, Ideas and Values” course that emphasized diversity replaced the course on Western Culture.23 This decision, however, 24 Packer, The Unwinding, 125. evoked a strong response by students on both sides of the political 25 Lisa Wallace and Alex spectrum including Peter. It led him to establish a conservative- Atallah, “A Brief and Non- Exhaustive History of the libertarian student-run newspaper, The Stanford Review, in 1987 Stanford Review,” Stanford Review, February 9, 2012, with like-minded Stanford undergraduates and through the fi nancial http://stanfordreview.org/ support and intellectual guidance of Irving Kristol, the father of neo- article/a-brief-and-non- 24 exhaustive-history-of-the- conservatism. During this time, the newspaper was interested in stanford-review (accessed challenging what they saw as a developing liberal bias and political June 3, 2015); Jodi Kan- 25 tor, “A Brand New World in correctness in the university’s changing curriculum. Which Men Ruled,” New York Times, December 23, 2014, In 1989 when Peter completed his bachelor’s degree in philosophy, http://www.nytimes.com/ interactive/2014/12/23/us/ his friend David Sacks became the new editor in chief of the paper. gender-gaps-stanford-94. Together in 1995, Peter and David published their collaboratively html?src=xps (accessed June 3, 2015). authored text, The Diversity Myth: “Multiculturalism” and the Politics of Intolerance at Stanford, wherein they take a hard-lined approach 26 Elizabeth Fox-Genovese, Forward, The Diversity Myth: against university multicultural curricula, seeing it as a battle against “Multiculturalism” and the Po- Western civilization.26 Peter’s experiences at Stanford, particularly litics of Intolerance at Stanford (Oakland, 1995), xiii. this period of curricular overhaul and cultural debate in the 1980s as

336 GHI BULLETIN SUPPLEMENT 12 (2016) The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

well as his encounters with the French Catholic philosopher, René Girard (1923-2015), aff ected him in a profound way. They helped to shape and solidify his perspectives on the world and on business practices, which he continues to champion today.

René Girard’s mimetic theory is one of the most infl uential concepts that continues to guide Peter’s thinking.27 The theory posits that all human behavior is based upon imitation or mimesis. As Girard writes, “there is nothing, or next to nothing, in human behavior that is not learned, and all learning is based on imitation.” Girard explains how “mimetic desire” or the imitation of desire can lead to competition, but oft en results in outright confl ict (i.e., people fervently competing for the same object or end). On the one hand, Girard ap- plauds the productive potential of competition: “It is because of this unprecedented capacity to promote competition within limits that always remain socially, if not individually acceptable that we have all the amazing achievements of the modern world.”28 On the other hand, though, he allows that it has the potential to stifl e progress once competition becomes an end in itself: “rivals are more apt to forget about whatever objects are, in principle, the cause of the ri- 27 Feloni, “Peter Thiel.” valry and instead become more fascinated with one another. . . . [It] 28 René Girard, Things Hid- becomes a matter of pure rivalry and prestige as competitors become den Since the Foundation of obsessed with their rivals.”29 Applying Girard’s theory to a business the World, trans. Stephen Bann and Michael Metteer context, Thiel claims that the intensity of competition does not refl ect (Stanford, 1987), 7, 307. an underlying value of a product: “People will compete fi ercely for 29 Girard, Things Hidden, 26. things that don’t matter, and once they’re fi ghting they’ll fi ght harder and harder.”30 Thus Thiel controversially contends that monopolies, a 30 Feloni, “Peter Thiel.” business that “owns its market” (he uses Google as an example), are 31 Peter Thiel, “Competition Is for Losers,” Wall the most eff ective avenues for business success and solving unique Street Journal, September problems: “Monopolies drive progress because the promise of years 12, 2014, http://www. wsj.com/articles/ or even decades of monopoly profi ts provides a powerful incentive peter-thiel-competition-is- to innovate.”31 Although his ideas on monopolies raise criticisms, for-losers-1410535536 (accessed July 7, 2015). he continues to maintain that competition encourages business leaders to focus on beating the competition instead of encouraging 32 Peter Thiel, “Peter Thiel on Why Everything the consideration of ethical questions, e.g. whether or not they are Good Is Actually Bad doing and producing something that they should in the fi rst place.32 and Vice Versa,” interview by Jeff Bercovici, Forbes, September 15, Aft er his undergraduate education, Peter continued on to Stanford 2014, http://www.forbes. Law School and graduated in 1992.33 Aft er interviewing with Supreme com/sites/jeff bercovici/ 2014/09/15/peter-thiel- Court Justices Antonin Scalia and Anthony Kennedy without off ers zero-to-one-book/2/ of employment, he took a job in New York City as a securities lawyer (accessed July 2, 2015). with Sullivan & Cromwell. Becoming a lawyer initiated one of the 33 Bahareth, Kings, 71.

O’DEA | PETER THIEL 337 unhappiest stages of his life.34 Recalling again Girard’s mimetic theory, Thiel began to question “the competitive life,” seeing little transcendent value in his work and in the constant competition with those around him. Aft er seven months and three days, Peter left the law ﬁ rm and took a job as a derivatives trader in currency options at Credit Suisse where he encountered the same issues that he experienced at the law ﬁ rm. This prompted him to leave New York altogether and return to Silicon Valley.35

His unsuccessful endeavors as a lawyer and derivatives trader led him to seek out alternative professional paths. As he explains, he realized the toxicity of using competition as a guide through life: “The big problem with competition,” he argues, is “it focuses us on the people around us, and while we get better at the things we’re competing on, we lose sight of anything that’s important, or tran- 34 Roger Parloff , “Peter Thiel 36 Disagrees with You,” Fortune, scendent, or truly meaningful in our world.” Peter continues to September 4, 2014, http:// keep Girard’s mimetic theory in mind in his own business practices fortune.com/2014/09/04/ peter-thiels-contrarian-strategy by trying to escape the unconscious compulsion to imitate others (accessed June 3, 2015). and instead practice a “contrarian” method that prompts one to 35 Packer, The Unwinding, consider: “What important truth do very few people agree with you 127-29. on?”37 In his most recently published book, Zero to One, he adapts 36 Drake Baer, “Here’s the Ad- this contrarian question and way of thinking to a business context vice Billionaire Investor Pe- by asking: “What valuable company is nobody building?”38 As Thiel ter Thiel Wishes He Could’ve Given His Younger Self,” Busi- explains, the world remains ﬁ lled with secrets that have yet to be ness Insider, February 4, 2015, http://www.businessinsider. discovered, and great companies can still be built by looking beyond com/peter-thiel-advice-to- conventions to instead explore “unsuspected secrets.” To him, Silicon younger-self-2015-2 (accessed June 3, 2015). Valley startups, such as Airbnb and Lyft , “have harnessed the spare capacity that is all around us but oft en ignored.”39 This line of reason- 37 Thiel with Masters, Zero to One, 5. ing helps to understand why Peter’s investment endeavors so oft en include unconventional projects such as SpaceX (Elon Musk’s com- 38 Ibid., 93. pany focused on revolutionizing rocket and spacecraft technology) 39 Ibid., 102-103. and Seasteading (a venture geared toward the creation of permanent

40 “Nur das wirklich Neue dwellings in international waters) that can seem impossible at ﬁ rst schaff t wirklich große Werte,“ glance. The majority of Thiel’s investment portfolio includes research qtd. in Christoph Keese, Si- licon Valley. Was aus dem projects and companies that strive to innovate outdated or oft en mächtigsten Tal der Welt auf non-existing practices. It is this desire for change and the belief that uns zukommt (Munich, 2014), 101; Maria Marquart, “Der only truly new advances yield the highest value in the end that have Deutsche bei Facebook: Thiel accompanied Peter throughout his professional life.40 gegen den Tod,“ Spiegel Online, February 3, 2015, http://www.spiegel.de/ Business Development: PayPal wirtschaft /unternehmen/der- deutsche-bei-facebook-thiel- Aft er returning to the California Bay Area in 1996, Thiel saw how much gegen-den-tod-a-812991. html (accessed June 3, 2015). it had changed since he had left four years prior. The development

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of the Internet and personal computer had quickly altered the economic landscape by creating the need for new hardware and soft - ware companies. By 1994, already over 315 public ﬁ rms operated their businesses in the area now known under the name “Silicon Valley” — coined in 1971 by the journalist Don Hoeﬂ er in a series of articles published in Electronics News.41 The Bay Area was the prime location for Peter to begin his new career as a venture capitalist, both because the so-called “dot-com boom” was well under way, and because the area had experienced a rich history of venture capitalist activity and decade long support of research and development in the technology industry. This is in large part attributed to Peter’s alma matter, Stanford University, and Frederick Terman (1900-1982), a “father of Silicon Valley,” who years aft er graduating from Stanford served as the university’s dean of the engineering school (1944-1958) and as university provost (1955-1965).42

Stanford had been a center of technical research since its beginnings in 1891, off ering eight out of its ten initial faculty appointments in science and engineering. For decades, Stanford not only supplied the area with important engineers, but also with key electronic entrepreneurs.43 Through the eff orts of university offi cials led by Terman, 41 Christophe Lécuyer, Ma- the university created strong links between faculty, students, and king Silicon Valley: Innova- the surrounding technology industry by funneling money into local tion and the Growth of High Tech, 1930-1970 (Cam- start-ups, like Hewlett Packard, and by encouraging students to cre- bridge, 2006), 253. ate their own electronics fi rms.44 Menlo Park, where Thiel set up his 42 Tom Nicholas and James fi rst hedge fund offi ce under the name Thiel Capital, had been the site Lee, “The Origins and Development of Silicon of Stanford’s Research Institute in 1946, which further displays the Valley,” Harvard Busi- university’s commitment to and investment in the rising technology ness School, January 30, industry.45 Over the course of the twentieth century, a collaborative, 2013, 3. entrepreneurial culture developed in the valley that gave rise to a rich 43 Ibid., 2-3. venture capital enterprise in the Bay Area. Unlike commercial banks, 44 Ibid., 3-4. venture capital fi rms could aff ord to take on more risk and tolerate the 45 Parloff , “Peter Thiel Dis- uncertainty of the fast-paced environment of their seeded companies. agrees”; Nicholas and Lee, Venture capital fi rms were also more able to spend time developing “Origins and Develop- ment,” 5. personal connections to other actors in the fl ourishing high-tech industry, which by the early 1990s turned Silicon Valley into one of 46 Nicholas and Lee, “Ori- gins and Development,” 46 the wealthiest high-tech regions in the world. 8-19.

With the ﬁ nancial support of friends and family, Thiel was able to 47 Unless otherwise noted, all 2014 USD values cal- raise $1 million (ca. $1.5 million in 2014 USD) toward the establish- culated by using www. ment of Thiel Capital and embark on his venture capital career in measuringworth.com/ uscompare (accessed July the mid-1990s.47 Early on, he experienced a setback aft er investing 10, 2015).

O’DEA | PETER THIEL 339 $100,000 in his friend Luke Nosek’s unsuccessful web-based calen- dar project. However, his luck changed when Max Levchin, a friend of Nosek’s, introduced him to his cryptography-related company idea named FieldLink, which later became their ﬁ rst company called Conﬁ nity in 1998.48 With this technology, they realized they could develop a soft ware, later called PayPal, to solve a gap in making pay- 48 Parloff , “Peter Thiel Dis- agrees”; Nicholas and Lee, ments. Although the use of credit cards and expanding ATM networks “Origins and Develop- provided consumers with more available payment options at the time, ment,” 5. not all merchants could gain the necessary permissions and hardware 49 Thomas Eisenmann and Lau- to accept credit cards.49 Thus, consumers were oft en left with little ren Barley, “PayPal Merchant Services,” Harvard Business choice, having to instead pay with exact cash or personal checks. School, March 13, 2007, 2. Nosek, Levchin, and Thiel wanted to use their technology to create 50 Packer, The Unwinding, 133. a type of digital wallet for Palm Pilots in the hopes of creating more

51 Eric M. Jackson, The PayPal consumer convenience and security by using Levchin’s original idea Wars: Battles with eBay, the with FieldLink of encrypting data on digital devices. Media, the Mafi a, and the Rest of Planet Earth, 2nd ed. (Los Angeles, 2006), 6-7. PayPal promised to open up new possibilities for handling money. It also exemplifi es an early way in which Peter tried to market products 52 “PayPal Closes $90 Million in Equity Financing,” PR that refl ected his libertarian worldviews. From a theoretical stand- Newswire, March 6, 2001, point, PayPal sought to create a new type of currency that would http://www.prnewswire. com/news-releases/paypal- circumvent government controls and give individuals more control closes-90-million-in-equity- over their money.50 PayPal fi t both Peter’s ideological, libertarian fi nancing-71553192.html (accessed June 3, 2015). stance as well as his desire to create products that solve problems and fi ll gaps. When PayPal launched at a successful press conference in 53 Jay Samit, Disrupt You! Master Personal Transformation, Seize 1999, representatives from Nokia Ventures and Deutsche Bank sent Opportunity, and Thrive in $3 million in venture funding (roughly $4.2 million in 2014 USD) to the Era of Endless Innovation (New York, 2015), 227- Peter with their Palm Pilots.51 By 2001, PayPal served over 6.5 mil- 28; Mark Odell, “Timeline: The Rise of PayPal,” Finan- lion customers and expanded its services to private consumers and cial Times, September 30, businesses in twenty-six countries.52 2014, http://www.ft .com/ cms/s/0/86432398-4897- 11e4-9d04-00144feab7de. PayPal continued to grow through mergers with Elon Musk’s fi nan- html#axzz3c8A6anMw cial services company, X.com in 2000 and with Pixo, Inc., a company (accessed June 4, 2015); “Mobile Money: Pixo and specializing in mobile commerce. This allowed PayPal to expand into PayPal.com Team to Send the wireless phone market, and transformed it into an even safer and Money via Wireless Phones,” Business Wire, February 22, more user-friendly tool by enabling users to transfer money via a free 2000, https://www.pay- online registration and email rather than by exchanging bank account palobjects.com/html/pr- 53 022200a.html (accessed June information. As the fi rst and largest Internet-based payment service, 4, 2015). PayPal received widespread public acclaim and was named one of

54 “PayPal CEO Invited to White the twenty-ﬁ ve top companies by Fortune Small Business Magazine. House,” PR Newswire, March, Thiel, PayPal’s co-founder and now chief executive offi cer, was even 27, 2001, http://www. prnewswire.com/news-re- invited to the White House in 2001 to meet with President George leases/paypal-ceo-invited-to- W. Bush and over one hundred other executives in the technology white-house-71860982.html (accessed June 4, 2015). industry to discuss national and industry related issues.54

340 GHI BULLETIN SUPPLEMENT 12 (2016) The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

In its early years, however, PayPal also experienced a number of setbacks that aff ected the company’s image and fi nances. To compete with PayPal, eBay launched its own version called Billpoint. Even though Billpoint did not experience the same user popularity as PayPal, it nonetheless created an environment of competition that Thiel did not favor. Simultaneously, PayPal’s user base threatened the company’s stability by potentially overwhelming its infrastructure through its vast expansion. This in turn led to a massive amount of backlogged emails to which the customer service team was unable to respond. Financially, PayPal was also operating at a $1 million per week loss as it sought to provide its services free of charge and instead make money from the interest accrued through users’ accounts. However, since many withdrew their funds immediately, there was oft en not enough time for interest to accrue. Others also chose to use the service with credit cards, which cost PayPal a fee of 2 percent per transaction. Additionally, fraudulent activity cost the company greatly, with one scheme, for example, costing PayPal $5.7 million over four months. In response, PayPal management created soft ware to detect suspicious activity, but unfortunately also wrongly restricted some user accounts as well, which further damaged their 55 Ari Weinberg, “PayPal consumer perception and led to a class-action lawsuit.55 To solve Runs up Against Compe- tition,” Forbes, March 8, some of its fi nancial diffi culties, PayPal instituted a small service 2002, http://www.forbes. charge for transactions, which was helpful to the company but was com/2002/03/08/ 0308paypal.html 56 unfavorable among consumers. Another legal issue arose from (accessed June 5, 2015). allegations by state banking institutions that fi led complaints with 56 Eisenmann and Barley, the FDIC claiming that PayPal should be regulated as a bank. Aft er “PayPal Merchant negotiations, the FDIC classifi ed PayPal, to its benefi t, as a business Services,” 2-3. in money transmission, not a commercial banking institution.57 De- 57 Jackson, PayPal Wars, spite these setbacks, PayPal managed to thrive on consumer Internet 195. sites, which led to eBay’s $1.5 billion purchase of PayPal in 2002.58 58 Margaret Kane, “eBay Picks up PayPal for $1.5 Billion,” CNET News, July 8, Through PayPal, Peter certainly gained worldwide attention and fame 2002, http://news.cnet. that launched not only his career, but also the careers of his friends com/2100-1017-941964. html (accessed June 5, and former PayPal colleagues, many of whom left PayPal aft er it sold 2015). to eBay. Labeled the “PayPal mafi a,”59 these men went on to form in- 59 Charlie Parrish, “Meet the vestment fi rms, philanthropies, energy and transportation business- PayPal Mafi a, the Richest es, and countless Internet companies, including Yelp, LinkedIn, and Group of Men in Silicon Valley,” Business Insider, YouTube. Representing a new generation of businessmen, this tight- September 20, 2014, knit community of former PayPal employees continues to regularly http://www.businessinsider.com/meet-the-paypal- support and fund each other’s ventures — a support network that mafi a-the-richest-group- developed out of PayPal’s hiring structure. PayPal’s founders and of-men-in-silicon- valley-2014-9 (accessed early employees recruited people that they personally knew from their June 15, 2015).

O’DEA | PETER THIEL 341 alma maters and through individual interactions. This practice of close networking has become typical in Silicon Valley, which is largely built by companies and people whose interconnected relationships give way to new startups and projects.60

Clarium Capital Management and Subsequent Ventures Aft er PayPal, Thiel established Clarium Capital Management, a global macro hedge fund, focusing on directional and liquid instruments in currencies, interest rates, commodities, and equities.61 In 2003 and again in 2005, Clarium Capital Management refl ected a net return of over 50 percent, a growth that would not continue throughout the 60 Miguel Helft , “It Pays to 2008 economic downturn and its aft ermath. Clarium’s success began Have Pals in Silicon Val- ley,” New York Times, Octo- to decline in 2006 with a 7.8 percent loss. During this time, the fi rm ber 17, 2006, http://www. sought to profi t in the long-term from its petrodollar analysis, which nytimes.com/2006/10/17/ technology/17paypal.html?ei foresaw the impending decline in oil supplies and an unsustainable =5088&en=943bf3f552d09f bubble growing in the U.S. housing market.62 Clarium’s assets indeed b2&ex=1318737600&partne $ r=rssnyt&emc=rss&pagewan grew to over 7 billion by 2008, however again declined as fi nancial ted=all&_r=0 (accessed June markets collapsed toward the end of 2008, causing the worst year on 5, 2015). record for hedge fund businesses.63 By 2011 aft er missing out on the 61 Peter Thiel, “Peter Thiel: economic rebound, many key investors pulled out, causing Clarium’s Founder and Portfolio Man- ager Clarium Capital Manage- assets to be valued at $350 million, two-thirds of which was Thiel’s ment,” interviewed by Sam own money. Yet, these events did not dampen Thiel’s investment Kirschner, The Investor’s Gui- de to Hedge Funds, ed. Sam energy and interest. Instead, he co-created another fund with Jim Kirschner, Eldon Mayer, Lee O’Neill and Ajay Royan in 2012 named Mithril Capital Management, Kessler (Hoboken), 89-92. named aft er a fi ctitious metal in The Lord of the Rings that represents 62 James Mackintosh, “Hedge 64 Fund Banking on Higher than protection and transformation. Unlike Clarium’s investment aims, Predicted Interest Rate Rises.” Mithril, a growth-stage venture fi rm with over $400 million under Financial Times, May 8, 2007, http://www.ft .com/intl/ its management, targets companies that are beyond the startup cms/s/0/6dc499e4-fd01- stage and ready to scale up. Mithril currently focuses on companies 11db-9971-000b5df10621. html#axzz3cUEdUebO (ac- developing soft ware, particularly in a cloud-computing environment. cessed June 8, 2015); George Most recently, it has invested millions of dollars into the company Packer, “No Death, No Taxes,” New Yorker, November 28, AppDirect, which off ers cloud services and app cloud connectivity 2011, http://www.newyorker. between platforms to a variety of businesses.65 com/magazine/2011/11/28/ no-death-no-taxes (accessed June 8, 2015); Deepak Gopi- nath, “Macro Man,” Bloomberg 64 Packer, “No Death, No 2015, http://techcrunch. Million Under Markets, January 2007. Taxes”; Zuckerman, “Pes- com/2015/02/11/ Management,” Forbes, simism.” peter-thiels-mithril- June 20, 2012, http:// 63 Gregory Zuckerman, “Pes- leads-a-50m-round-for- www.forbes.com/sites/ simism Exacts a Price on the 65 Ingrid Lunden, “Peter appdirect-and-its-cloud- ryanmac/2012/06/20/ Skeptics,” Wall Street Jour- Thiel’s Mithril Leads a based-marketplace/ peter-thiel-launches- nal, September 29, 2009, $50M Round for (accessed June 9, 2015); new-venture-fi rm-with- http://www.wsj.com/articles/ AppDirect and Its Cloud- Ryan Mac, “Peter Thiel 400-million-under- SB125409165677744755 (ac- Based App Marketplace,” Launches New Venture management/ (accessed cessed June 87, 2015). TechCrunch, February 11, Firms with $400 June 9, 2015).

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Before establishing Mithril, Peter’s personal connections in Silicon Valley would lead him to his next important investment aft er PayPal. In 2004, Peter’s longtime Stanford friend, Reid Hoff man (former executive president of PayPal and later co-founder of LinkedIn),66 and Hoff man’s friend, Sean Parker (co-creator of Napster), introduced him to Mark Zuckerberg, the founder and CEO of Facebook. Thiel became Facebook’s fi rst major fi nancier with a $500,000 investment, later converted to a 10.2 percent stock, and a seat on its board.67 Facebook is widely known for having revolutionized person-to-person interactions in an online environment, leading to what is now referred to as social media.68 That same year Thiel co-founded a tech-security company called Palantir Technologies, named aft er a crystal ball from The Lord of the Rings, with his Stanford friend Alex Karp. Palantir uses anti-fraud technology developed at PayPal to synthesize large amounts of data in order to track down potential terrorists and criminals. The technology is primarily used by U.S. intelligence agencies (the C.I.A.’s venture capital arm invested around $2 million into the company) and hedge funds, but has been accused of privacy violations.69 Although Palantir had been initially conceived as a tool to enhance security and fi ght against fraudulent activity, its data- mining technology has created fears among privacy advocates, who allege the tool allows its users (no longer only government, but also private businesses) to “see too much” and violate individual privacy.70 A major scandal occurred in 2011 when Karp publically severed ties with HBGary, a technology security fi rm, aft er emails discussing a 70 Andy Greenberg, “How proposed launch of illegal cyber attacks and misinformation against a ‘Deviant’ Philosopher the well-known WikiLeaks organization were revealed. The emails Built Palantir, a CIA- Funded Data-Mining Jug- featured the logos of the companies, HBGary, Palantier, and Berico gernaut,” Forbes, August Technologies, implying their involvement in the proposal. Karp 14, 2013, http://www. forbes.com/sites/an- apologized for the company’s alleged role in the aff air and explained dygreenberg/2013/08/14/ in his apology letter that Palantir does not intend to allow private agent-of-intelligence-how- a-deviant-philosopher- 71 sector entities to obtain non-public information. Yet, the incident built-palantir-a-cia-funded- extended fears of Palantir’s potential use in illegal data-gathering data-mining-juggernaut/4/ (accessed June 9, 2015). operations, which it claims to seek to prevent. 71 Andy Greenberg, “Palantir Appologizes for WikiLeaks 66 See Inka Brandt, how-facebook-was- 69 Packer, The Unwinding, Attack Proposal, Cuts “Konstantin Guericke,” founded-2010-3?op=1 210-12. Quentin Hardy, Ties with HBGary,” For- in IE. (accessed June 8, 2015). “Unlocking Secrets, if Not bes, February 11, 2011, Its Own Value,” New York http://www.forbes. 67 Nicholas Carlson, 68 David Kirkpatrick, Times, May 31, 2014, com/sites/andygreen- “At Last — The Full Story The Facebook Eff ect: http://www.nytimes.com/ berg/2011/02/11/ of How Facebook Was The Inside Story of the 2014/06/01/business/ palantir-apologizes-for- Founded,” Business Insider, Company That Is Connec- unlocking-secrets-if- wikileaks-attack-propos- March 5, 2010, http:// ting the World (New York, not-its-own-value.html al-cuts-ties-with-hbgary/ www.businessinsider.com/ 2010). (accessed June 8, 2015). (accessed June 30, 2015).

O’DEA | PETER THIEL 343 Thiel’s investment activities continued with his co-creation of the early-stage venture capital fi rm, the Founders Fund, in 2005. Its portfolio includes the companies Spotify, Airbnb, and Lyft among others that focus on consumer Internet as well as health and science related research and development startups. Since its foundation, the fund has collected over $2 billion, and most recently has invested in Privateer Holdings, a cannabis company.72 Although this investment has been met with criticism, the Founders Fund is among the fi rst major investment fi rms to do business within the marijuana industry. Many fi rms are still weary of fi nancially backing such companies since marijuana remains illegal on the federal level.73 Nonetheless, this investment refl ects Thiel’s and the Found- ers Fund’s desire to invest in new ideas and markets that strive for a libertarian sense of freedom and independence.74 Finally in 2010, Thiel backed a globally oriented venture capital fi rm, Valar Ventures, with former PayPal employee Andrew McCormack and former Thiel Capital employee James Fitzgerald in order to invest in companies outside of the United States.75

Becoming increasingly concerned with health and longevity, the Founders Fund has also funded the research of companies like Halcyon, a biotech fi rm interested in reading the entire human DNA sequence, or the Methuselah Foundation, which seeks to reverse human aging. Additionally refl ecting Peter’s libertarian worldview, the fund has also invested in methods of establishing spaces outside the realms of government through SpaceX and the Seasteading 72 Erin Griffi th, “Founders Fund Joins $75 Million Investment Institute. SpaceX has received wide attention for its ambitions to in Cannabis Company,” For- launch a reusable rocket, Internet-beaming satellites, and establish tune, January 8, 2015, http:// 76 fortune.com/2015/01/08/ a commercial market for space travel. Seasteading, on the other founders-fund-privateer-hold- hand, strives towards a libertarian ideal by creating livable platforms ings (accessed June 8, 2015). in international waters that escape the confi nes of governments and 73 Alex Konrad, “Legal Mari- form independent city-states as spaces to experiment with new types juana Co. Privateer Holdings 77 Scores Millions from Peter of governance. One such place, unaffi liated with the Seasteading Thiel’s Founders Fund,” For- bes, January 8, 2015, http:// 76 “Reusability: The Key 2015, http://www.engad- articles/2014-05-30/for- www.forbes.com/sites/ to Making Human Life get.com/2015/06/04/ libertarian-utopia-fl oat- alexkonrad/2015/01/08/ Multi-Planetary,” SpaceX, spacex-wants-to-launch- away-on-startup-nation the-vcs-and-privateer- March 19, 2015, http:// internet-beaming-sat- (accessed June 8, 2015); betting-on-pot/ (accessed www.spacex.com/ ellites (accessed June 8, Jonathan Miles, “The Bil- June 15, 2015). news/2013/03/31/re- 2015). lionaire King of Techto- usability-key-making- pia,” Details, September 1, 74 Packer, “No Death, No human-life-multi-plan- 77 Edward Robinson, “For 2011, http://www.details. Taxes.” etary (accessed June 8, Libertarian Utopia, Float com/culture-trends/ 2015); Andrew Tarantola, Away on ‘Startup’ Na- critical-eye/201109/peter- 75 “About,” Valar, http://www. “SpaceX Wants to Launch tion,” Bloomberg, May thiel-billionaire-paypal- valar.com/about (accessed Internet-Beaming Satel- 30, 2014, http://www. facebook-internet-success July 2, 2015). lites,” Engadget, June 4, bloomberg.com/news/ (accessed June 9, 2015).

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Institute, already exists. It is known as the Principality of Sealand and was constructed during World War II as a concrete sea fort off of Britain’s coast. The family that currently resides there has been ﬁ ghting a number of lawsuits to gain recognition as a sovereign state.78 Seasteading poses the potential for similar issues in the 78 “Cities on the Ocean,” future. Since its launch, the Founders Fund has been successful in Economist, Decem- supporting startup companies that support its mission of solving ber 3, 2011, http:// www.economist.com/ “diffi cult problems” of today in innovative and transformative ways node/21540395 (ac- while simultaneously furthering Thiel’s libertarian worldview.79 cessed June 9, 2015). 79 Bruce Gibney, “Most VCs are Investing all Wrong,” Philanthropy and Public Image interviewed by Matt Rosoff , Business Insider, Along with his large and dispersed venture capitalist activity, Thiel June 24, 2011, http:// www.businessinsider. has funded a number of philanthropic projects under his Thiel com/how-founders-fund- Foundation. Currently, the foundation supports three projects: the is-diff erent-from-other- vcs-2011-6 (accessed Breakout Labs, the Thiel Fellowship, and Imitatio. These projects June 9, 2015). reﬂ ect Thiel’s vision for an improved future that includes anti- 80 “Tech Philanthropists. aging science, alternative paths to a conventional university educa- Guide to Top Funders in tion, and an understanding of human behavior based on Girard’s the Technology Industry: Peter Thiel,” Inside Philan- mimetic theory. Peter envisions his Foundation as a support for thropy, 2014, http://www. unconventional, bold ideas that have the potential to disrupt and insidephilanthropy.com/ guide-to-individual- 80 transform society. Its slogan, prominently displayed on the website, donors/peter-thiel.html aptly reads “We’re Championing BOLD THINKERS WHO PURSUE (accessed June 10, 2015). UNRECOGNIZED TRUTHS.” 81 Packer, The Unwinding, 393; “The Foundation.”

One of the most controversial projects launched by the Thiel Founda- 82 Peter Thiel, “Thinking tion is the Thiel Fellowship for twenty people under the age of twenty. Too Highly of Higher Ed,” $ Washington Post, No- Each fellow is awarded 100,000 to quit college and start their own vember 21, 2014, http:// ventures. Launched in 2011, the program sought to give young people www.washingtonpost. com/opinions/peter-thiel- an alternative to the more conventional path of attending college thinking-too-highly-of- directly aft er high school. Given the rising tuition prices, the idea higher-ed/2014/11/21/ f6758fb a-70d4-11e4- seemed attractive to some and also in part encouraged a reevalua- 893f-86bd390a3340_ tion of the value and aims of a college education. Others, however, story.html (accessed July 2, 2015). reacted in strong opposition to the idea and criticized the foundation for cutting students’ educations short.81 Thiel as a long-time critic 83 Vivek Wadhwa, “In De- fense of College: What Pe- of the university system claims that college creates a “bubble” and ter Thiel Gets Wrong, Once a system of competition for “old career tracks . . . instead of doing Again,” Washington Post, December 1, 2014, http:// 82 something new.” Those critical of Thiel’s views and in defense of www.washingtonpost. higher education explain how he overlooks not only the earning po- com/blogs/innovations/ wp/2014/12/01/ tential of college graduates, but also other important developmental in-defense-of-college-what- aspects, such as the ability to work in groups, the gain of technical peter-thiel-gets-wrong- once-again/ (accessed July knowledge, and the capability to continually learn.83 2, 2015).

O’DEA | PETER THIEL 345 As it is, however, these fellows can still attend college aft er their two-year fellowship term, and some fellows credit their experiences as having granted them valuable insight into real-world business operations.84 Along with receiving ﬁ nancial support, the Thiel fellows are also matched with a mentor (and Thiel’s network of contacts) to assist them in realizing their entrepreneurial visions. Since the program’s launch in 2011, it has grown in popularity with a record number of over 2,800 applicants in 2015. That same year, the foundation decided to expand its program to accept thirty fellows each year and changed its age-cap to twenty-two years old. The fellowship results have been mixed, with some students returning to college 84 Jessica Goldstein, “Jump- aft er their fellowship term and others choosing to indeed launch their ing Off the College Track,” Washington Post, August 3, own businesses and nonproﬁ t organizations, such as SunSaluter, a 2012, http://www.washing- device designed to provide cheap solar energy and clean water for tonpost.com/local/education/jumping-off -the-college- people in developing countries. To date, there have been four classes track/2012/08/03/ of fellows, eighty-three participants in total, whose ventures raised 452f2d22-d777-11e1-a920- $ $ c0709ff f70f5_story.html 72 million in investments and 29 million in revenue. Some even (accessed June 10, 2015). sold their startups bringing in $17 million collectively.85

85 Beth McMurtrie, “The Rich Man’s Dropout Club,” Chroni- This fellowship is one of the foundation’s three projects that reﬂ ect cle of Higher Education, Febru- Peter’s ideal of thinking independently and “against the grain.” The ary 8, 2015, https://chronicle. com/article/The-Rich-Mans- Breakout Labs, also launched in 2011, seek to change the way early- Dropout-Club/151703/ (ac- stage science and technology research is funded by using revolving cessed June 9, 2015); “Thiel Foundation Announces 2015 funds. This means that successful projects within the Breakout Thiel Fellows, Expands Fel- Labs will assign a portion of their revenue back into the program to lowship Program,” Thiel Fellowship, June 5, 2015, support other projects. Largely, the Breakout Labs seek out projects http://www.thielfellowship. that are “too ahead of their time for traditional funding sources.” In org/2015/06/2015-thiel- fellows-press-release/ some cases, the program even supports promising research projects (accessed June 9, 2015). before the “proof of concept” phase. Currently, the Breakout Labs 86 “Peter Thiel Announces support over twenty science, technology, and biomedical research Breakout Labs to Energize In- novation,” Business Wire, Oc- and development companies geared toward longevity research, the tober 25, 2011, http://www. development of new scientiﬁ c measuring tools, tissue engineering, businesswire.com/news/ 86 home/20111025007276/ and human language computer recognition soft ware. en/Peter-Thiel-Announces- Breakout-Labs-Energize- The third project supported by the Thiel Foundation, Imitatio, pur- Innovation#.VXiNFTBVhBc (accessed June 10, 2015); sues research and the application of René Girard’s mimetic theory. “Portfolio,” Breakout Labs, Imitatio furthers his insights by translating mimetic theory works 2014, http://www. breakoutlabs.org/portfolio/ into diff erent languages, by publishing and preserving his writings (accessed June 10, 2015). and new publications on mimetic theory, and by supporting research 87 87 “Imitatio Projects,” Imitatio, that aims to understand human behavior via mimetic theory. 2015, http://www.imitatio. org/about-imitatio/imitatio- Along with his companies’ investments, these projects have projects.html (accessed June 10, 2015). shaped Peter’s public image as a “contrarian thinker,” “eccentric,”

346 GHI BULLETIN SUPPLEMENT 12 (2016) The Analysis of Immigrant Entrepreneurship in the Mirror Introduction Entrepreneurship of Biographical Analysis

and “provocateur.”88 His public image has also extended beyond Silicon Valley and the tech industry through character appearances in popular media. Although he doesn’t make a personal appearance, Thiel (played by the actor Wallace Langham) is depicted in The Social Network (2010), a fi lm interested in psychoanalyzing Facebook’s creator Mark Zuckerberg and the fi gures behind the company’s establishment,89 in a short scene agreeing to invest in the company. The TV series Silicon Valley (2014-) also used Peter Thiel as inspiration for a key angel investor character in the show, Peter Gregory.90 Addition- ally, Peter co-fi nanced the feature fi lm, Thank You for Smoking (2005), a satire on the spin tactics of a tobacco lobbyist. Staying true to the tight-knit Silicon Valley network, Peter co-produced the fi lm with former PayPal colleagues David Sacks, Max Levchin, and Elon Musk.91

Peter also regularly appears in German media outlets. Since he grew up speaking German at home, he is able to personally conduct interviews in the German public with major German media outlets such as » establishing new companies that do not yet exist, Die Zeit, the Frankfurter Allgemeine Zeitung, and Der Spiegel among in his opinion, German in- others. His background aff ords him the ability to seamlessly interact dustries beget numerous companies doing similar, within and between German and American cultures, and grants him a if not the same, things. See voice in both German and American business arenas. Despite the fact “Peter Thiel hält deutsche Start-ups für zu sozialde- 92 that he is oft en critical of Germany’s technology start-up culture, mokratisch,” Zeit he most recently invested into two Berlin start-ups: EyeEm, a net- Online, September 30, 2014, http://www.zeit. work for photographers, and Number26, a mobile banking app. He de/video/2014-09/ 3811512456001/ has also invested in two startups based in London: Transferwise, a facebook-investor-peter- money transfer fi rm, and Deepmind, an artifi cial intelligence group.93 thiel-haelt-deutsche- start-ups-fuer-zu- sozialdemokratisch (accessed June 10, 2015); Conclusion Christian Rickens, “Face- book-Investor Peter Thiel: A 2015 article in Forbes magazine appropriately summarized Peter’s ‘In Deutschland herrscht thoughts on business in six points: to think like a contrarian, to sup- Angst vor dem Erfolg,” Spiegel Online, August 27, port new innovation, to not shy away from contradiction (even if self- 2014, http://www.spiegel. contradictory), to escape the crowd, to not fear action or ideas that de/wirtschaft /unternehmen/peter-thiel-ueber-facebook-deutschland-und- asperger-a-994125.html 88 Parloff , “Peter Thiel Dis- 89 J. Hoberman, Film Aft er valley-jokes-2014-4 (ac- (accessed June 10, 2015). agrees”; Jay Yarow, “Pe- Film: Or, What Became cessed June 10, 2015). ter Thiel: Progress Ended of 21st Century Cinema? 93 Jeevan Vasagar, “Peter Aft er We Landed on the (Brooklyn, 2012), 37. 91 Helft , “Pays to Have Pals.” Thiel Changes Course Moon and ‘Hippies Took with Funding of Two Ber- Over the Country,’” Busi- 90 Julie Bort, “A Guide to the 92 In a recent interview with lin Start-Ups,” Financial ness Insider, October Best Inside Jokes on HBO’s Die Zeit, Peter for exam- Times, April 16, 2015, 23, 2014, http://www. Hit Comedy ‘Silicon Val- ple remarks upon Germa- http://www.ft .com/cms/ businessinsider.com/ ley’,” Business Insider, April ny’s start-up culture to s/0/562ba760-e44c- peter-thiel-on-prog- 28, 2014, http://www. be too social democratic 11e4-9039-00144feab7de. ress-2014-10 (accessed businessinsider.com/a- and as refl ecting a “fear of html#axzz3fDmYzuxM June 10, 2015). guide-to-hbos-silicon- success.” Instead of » (accessed July 2, 2015).

O’DEA | PETER THIEL 347 conventional society fi nds “weird,” and, fi nally, to establish a shared mission within one’s corporate culture.94 His success has gained him widespread international attention with much interest devoted to his thought process, worldview, and ideas for the future. As an entrepreneur, Peter displays a diversifi ed portfolio with his fi rms that currently cover three diff erent investment stages: His Founders Fund supports startups, Mithril Capital Management funds companies in their important growth stage, and Clarium Capital Management focuses on global macroeconomic investments. The philanthropic work conducted by his Thiel Foundation also displays an interest in developing new leaders and innovations. As his list of funded companies refl ects, Thiel does not shy away from risk and places value on companies that seek to innovate and produce products that at fi rst may seem impossible or contrary to popular belief. His writings and endeavors show his strong belief in the possibilities aff orded via technology and the potential of individual ideas, which with proper support, can impact and improve the future.

During his career, he has received multiple awards including the “Herman Lay Award for Entrepreneurship” in 2006, the title of a “Young Global Leader aged 40 and under” by the World Economic Forum in 2007, and most recently the TechCrunch Crunchie Award 94 Andrew Cave, “How to Win for “Venture Capitalist of the Year” in 2012.95 Thiel is also classiﬁ ed Like PayPal Co-founder Peter Thiel: Six of His Rules as a master in chess and was a math champion in California.96 for Business Success,” For- bes, May 3, 2015, http:// www.forbes.com/sites/an- Meghan O’Dea received her bachelor’s degrees in German, Political Science, and drewcave/2015/05/03/ how-to-succeed-like-paypal- International Studies from Colorado State University in 2010. Aft er an internship co-founder-peter-thiel-six-of- with the Department of State at the U.S. Consulate in Hamburg, Germany, she his-rules-for-business- began a master’s degree in German Studies at the University of Florida, which success/3/ (accessed June 10, 2015). she completed in 2012. Currently, she is a Ph.D. candidate and Graduate German Instructor at Georgetown University in the Department of German and working 95 Bahareth, Kings, 73; on her dissertation tentatively titled, “Geopolitical Transformation and Narratives Leena Rao, “Chris Dixon of Return: Literary Return Visits and Tourism to Lost Homes in the German East.” Wins Crunchies 2012 ‘An- gel of the Year’; Peter Thiel She worked at the GHI in the summer of 2015 and contributed to the Immigrant Is Named ‘VC of the Year,’” Entrepreneurship project by writing biographies for Volume Five. TechCrunch, January 31, 2013, http://techcrunch. com/2013/01/31/chris- dixon-wins-crunchies-2012- angel-of-the-year-peter-thiel- is-named-vc-of-the-year (accessed June 1, 2015).

96 Steven Drobny, Inside the House of Money: Top Hedge Fund Traders on Proﬁ ting in the Global Markets (Hoboken, 2006), 165-66.

348 GHI BULLETIN SUPPLEMENT 12 (2016) Bulletin of the GHI | Supplement 12

Bulletin of the German Historical Institute Supplement 12 (2016)

Immigrant Entrepreneurship IMMIGRANT ENTREPRENEURSHIP The German-American Experience since 1700

Edited by Hartmut Berghoff and Uwe Spiekermann